Admarc by-passed Treasury in Kaloswe contract

Tom Sangala January 27, 2017

325 2 minutes read

Secretary to the Treasury, Ronald Mangani, has told the joint parliamentary committee of Agriculture and Public Accounts that the Treasury only came to know that Agricultural Development and Marketing Corporation (Admarc) signed and cancelled a deal with Zambia’s Kaloswe Commuter and Courier Limited on January 6 this year.

Mangani said it was only after the board of directors for Admarc held an emergency meeting on January 6 and shared the documentation with the Treasury that they learnt such a deal ever existed.

“We actually made it clear to them that we didn’t’ expect this contract to exist and the facts on this matter are out there for all to see,” Mangani said.

Admarc signed a contract with Kaloswe on June 17 2016, the Office of the Director of Public Procurement(ODPP) issued the letter of no objection on the deal on June 18 and Mangani said at the time the contract was signed his office was seeking advice from Reserve Bank of Malawi (RBM).

Speaking when he appeared before the committee yesterday, the secretary to treasury said Admarc wrote the treasury on June 8 2016 asking for a guarantee to enable the public grain marketer to obtain a loan amounting to $50 million from Ecobank for maize purchase locally and internationally.

According to Mangani, Admarc told the Treasury that $10 million was for local maize purchase and $40 million was for international purchase.

He said in response to Admarc’s request, the Treasury wrote Reserve Bank of Malawi (RBM) on June 13 and RBM sent a letter containing the advice on the same day Admarc and Kaloswe officials were putting their signatures on paper.

“The Reserve Bank advised us not to use Ecobank, as per Admarc’s request, but to use an already existing line of credit with PTA Bank which would be a bit cheaper and efficient and we wrote the Reserve Bank on our agreement with their advice, for us to use the letter of credit with PTA, on July 4[2016],” he told the committee.

One Parliamentarian Richard Chimwendo-Banda, however, wondered how Mangani whose office was copied with the Kaloswe contract failed to know its existence and cancellation to which Mangani said sometimes copies may be shown but not reach the intended recipients and the committee is better placed to make any conclusions.

Mangani also said Treasury did everything to ensure that Admarc is resourced but on whether Admarc rightly followed the Public Procurement Act and Public Finance Management Act, it is up to the joint parliamentary committee to establish through its inquiry.

He also said the Treasury is not aware that Admarc ever asked for an extension of letter of credit with PTA Bank beyond December 31 2016 to enable Zambia Cooperative Federation (ZFC) to supply up to the alleged minimum 10,000 metric tonnes to facilitate payment.

At the beginning of his presentation, Mangani took some minutes to let the committee know that Treasury works on trust that controlling officials and systems in the public institutions will make good use of the finances and follow all laid-down procedures.

“As Treasury, we understand that each and every public institution has controlling sections that are responsible for the adherence to the provisions that guide financial management in their respective institutions and if Treasury was involved in the work of such sections, it would be difficult for us to monitor as that would mean we are party to whatever is happening in the institutions we are monitoring,” Mangani said.

He then said the relationship between ODPP and the Treasury is too hazy to enable treasury to follow its operations.