Agricultural Development and Marketing Corporation (Admarc) Chairperson Alexander Kusamba Dzonzi has blamed the Ministry of Finance for failing to facilitate paperwork for the corporation to source 518 million US Dollars (about K524 billion at today’s value) to carter for recapitalisation of Admarc.
In an interview with Malawi News on Wednesday, Dzonzi said last year they had identified the money from offshore financiers but the then Minister of Finance Felix Mlusu stood in Admarc’s way.
“He frustrated the whole recapitalisation move and threw it away. He did so by refusing to sign the NDA but forced the Reserve Bank of Malawi (RBM) and Financial Intelligence Authority (FIA) to audit the financial arrangers instead of the financiers themselves. These two institutions came up with fictitious due diligence reports which were not filed with Admarc nor made public as a basis for his refusal to recapitalise Admarc. It is important though to know that our fiscal laws give the Minister of Finance power to commit government or any public institution on any fiscal matters like contracting a loan for Admarc,” he said.
Dzonzi said the money was found last year at 1.5 to 3 percent interest rates, with a grace period of 5 years before repaying the loan.
“In line with our fiscal laws, we prepared all the paperwork which was cleared by the Minister of Agriculture and submitted for final approvals to the then Minister of Finance who refused Admarc access to that funding window. On June 3, 2021, the then Minister of Finance used such powers to deny Admarc access recapitalisation funds and secure 300,000 tons of fertilizer which led to the problems the country experienced in the AIP. For Admarc to be fully recapitalized, it needs the president, Minister of Finance, Minister of Agriculture and the Board to boldly do what late Magufuli was doing for Tanzanians,” he said.
There was no immediate comment from Minister of Finance Sosten Gwengwe but in December last year, Mlusu had told Times that initially, the decision was not necessarily frustrated but that the foreign financing institution needed to be properly vetted.
“[There was] nothing [like being] stopped from borrowing from foreign lenders. However, these foreign lenders needed to be vetted by relevant local authorities specialising in those matters by doing due diligence before giving any clearance where necessary. To my knowledge, local banks did not refuse to fund Admarc; they are funding them now,” Mlusu said.
In 2020, the state-owned grain trader, through its former acting Chief Executive Officer Felix Jumbe, asked the Parliament’s Committee on Agriculture top help lobby for K300 billion for recapitalisation.
Admarc asked the committee to convince the Ministry of Finance to allow it to borrow the money for the purpose.
Among others, Admarc argued that there was need to increase its markets and make the corporation ready to buy any agricultural produce from farmers.
In recent years, the state grain trader has been failing to buy all the produce from farmers, leaving many of them to fall victim to low prices offered by vendors.