Malawi cancels $145 million arms deal with SA firm: report

Malawi's new government has cancelled a $145 million arms deal with South Africa's Paramount Group, Finance Minister Goodall Gondwe said.

"The agreement between the Malawi Government and Paramount Group has been abrogated. That is all I can confirm and say," Gondwe told Saturday's Nation newspaper.

The paper quoted a source within the finance ministry as saying the government of President Peter Mutharika told the firm the deal was "illegal and expensive".

The agreement with Paramount, Africa's largest private defence firm, was signed by the former administration headed by Joyce Banda, who was ousted by Mutharika in May elections.

Under the deal, the impoverished southern African nation was expected to make quarterly payments of $5 million over several years for patrol boats and other military equipment.