Paramount’s Malawi arms deal on the rocks - CNBC Africa

Paramount’s Malawi arms deal on the rocks

Southern Africa

by Trust Matsilele 0

Paramount’s arms deal with former President Joyce Banda is on the rocks. PHOTO: cepa/africom.

President Peter Mutharika’s administration is reported to have cancelled a 145 million US dollar deal with Paramount Group arguing that it was both illegal and expensive.

(READ MORE: Mutharika's opposition DPP wins Malawi elections; Electoral Commission)

Paramount is the largest privately-owned defence and aerospace business in Africa with unique capabilities in land systems, aerospace, naval systems, advanced technologies and electronic systems.

The group has one of the strongest aerospace offerings in Africa comprising supersonic fighter aircraft solutions, air force establishment, systems integration, avionics, UAVs, sighting and mission sensors. 

British newspaper, The Telegraph, reported that President Peter Mutharika had told the firm that the 145 million deal was illegal and expensive.

The deal signed between ousted Malawian President Joyce Banda and the defense firm sparked an uproar in the media circles after Banda used one of the firm’s private jets.

According to local media reports in Malawi, the deal had not been cancelled but was being renegotiated on new terms.

(READ MOREMalawi's new president Mutharika vows to rebuild economy)

The deal expected the largely donor dependent economy to make quarterly payments of five million US dollars for patrol boats and other military equipment over a number of years.

The Telegraph also reported that Paramount had signed wide-ranging deals with Banda’s cash-strapped Malawi government for agriculture, fuel and military contracts through a network of investment firms.

As Mutharika continues consolidating his power-base, more deals signed with the previous administration could be thrown out in the next coming months that could cost companies millions of dollars.