By Cathy Maulidi:
Agriculture Minister Sam Kawale Friday announced the suspension of the East Bridge fertiliser deal until further notice.
Kawale made the announcement in Parliament, where he made a statement on the status of the deal, after Machinga East Member of Parliament Esther Jolobala had asked for a statement.
According to the minister, his ministry is transferring the deal to Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) since it is commercial in nature and the ministry does not deal in commercial issues.
“After facilitating the transaction, my ministry is now in the process of transferring the deal to SFFRFM because this is purely a commercial transaction. So, until the transferring process is completed, the deal remains suspended,” Kawale said.
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He said processes of transferring the deal from the ministry to SFFRFM are expected to be completed before the end of this month.
“After everything is done, SFFRFM will facilitate the receiving and distribution of the fertiliser across the country because this is a purely commercial transaction; this is not under AIP [Affordable Inputs Programme],” Kawale said.
Kawale added that the deal will continue with the guidance of relevant institutions such as the Office of the Attorney General, Anti- Corruption Bureau and Public Procurement and Disposal of Assets (PPDA) Authority.
Meanwhile, the government has withdrawn the sovereign guarantee that Finance Minister Sosten Gwengwe granted East Bridge.
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But Kawale assured that a new instrument would be granted to East Bridge once the transfer process is done.
Asked if he would be granting other guarantees after the deal is transferred to SFFRFM, Finance Minister Sosten Gwengwe said Cabinet would decide on that.
“Cabinet will decide,” Gwengwe said in a written response.
Recently, Gwengwe said the government withdrew the sovereign guarantee for the deal.
However, the Budget and Finance Committee, through its chairperson Gladys Ganda, has warned the government to be cautious on the guarantees it may issue again.
“In fact, we need reforms on guarantees for Parliament to be involved. The Minister of Finance is not mandated to bring guarantees to Parliament for approval and this is a weakness in the law. If guarantees are brought here before granting, we could have been avoiding these mistakes,” she said.
Ganda added that government should review the deal and consult before proceeding.
Owner of the question, Jolobala, has since said she is not impressed with how the Minister of Agriculture responded to her question.
“The deal has been halted because proper procurement procedures were not followed. Was the cost-benefit analysis done at the time the ministry was signing the deal? We could have avoided all this if due diligence had been conducted,” Jolobala said.
Under the deal, Malawi is expected to produce farm produce worth about K500 billion in exchange with fertiliser, valued at $250 million.
