Malawi: Techno Brain Debacle Terrifies Foreign Investors
Last week, the dispute between the government of Malawi and e-passport manufacturer Techno Brain escalated massively when officers from the Department of Immigration and Citizen Services (DICS) stormed a house belonging to the technology company and detained one of their employees: an Indian technical engineer called Prakash Naidu.
Techno Brain filed for a judicial review into the matter on Tuesday, however at present Mr Naidu remains under effective house arrest. The government’s response to this has been frankly terrifying, with Attorney General Thabo Chakaka Nyirenda arguing that Mr Naidu’s detention by DICS is defensible to prevent him from accessing Techno Brain’s data centre and removing any files. In effect his kidnap has been sanctioned by the state in order to resolve a contract dispute.
The disagreement between the government and Techno Brain is complex, with the Attorney General yet to produce any proof that the company fraudulently obtained its contract in 2019 as he claims it did. Ultimately, however, it is ordinary Malawians who will end up losing out.
Since the government cancelled its contract with Techno Brain last week, Malawians have faced extraordinary delays in receiving their passports. Last week, the DICS announced that it would only be approving emergency passports, leaving those looking to travel for business or pleasure with astronomical waiting times.
DICS officers posted outside the Techno Brain guesthouse in Lilongwe.
In addition, the dispute itself – not to mention the kidnapping of a foreign national by Malawian state officials – will serve as a cautionary tale to any international company looking to invest in Malawi. In a letter dated 26 November, the government acknowledged that it owed Techno Brain some US$23 million and promised to pay this back. However, it now seems to have no intention of paying what it owes, instead laying claim to Techno Brain’s intellectual property and holding its employee ransom until the company coughs up.
It’s hard to imagine any kind of foreign investor wanting to do business with the government after this kind of behaviour. Indeed, DICS is currently struggling to find a new international partner to replace Techno Brain and deliver the 800,000 e-passports the company was contracted for. Investors are understandably worried about what might happen to them or their employees down the line.
At present it looks like most Malawians are supportive of the government, cheering on Attorney General Nyirenda as he goes toe to toe with corporates. But the government’s behaviour is anything but admirable. On several occasions the Attorney General has accused Techno Brain of obtaining its contract improperly without producing any kind of evidence to support these claims. The government has also repeatedly complained about the price of passports while conveniently ignoring the high levels of investment Techno Brain has made to establish the infrastructure for printing, distributing and administrating the passports – at great upfront cost to the company. And now it has illegally detained a foreign national without just cause, while claiming he is human collateral on a simple contract dispute.
In the end, it won’t be Techno Brain that pays for this or even the government, but ordinary Malawians. Foreign companies will move their operations elsewhere, for fear that they too will have their contracts torn up and their fees forgotten about. With them will go the jobs and any opportunities for training and advancement that might benefit Malawian workers. Infrastructure will also deteriorate as the roads, railways, dams and databases that keep the country running suffer from a lack of foreign investment and expertise.
If the government really cared about Malawians, it would resolve its dispute with Techno Brain amicably and in a way that demonstrates respect for the rule of law. This present posturing will do little good in the long run and only serves to blackball Malawi from any kind of future development.