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Admarc given K22 billion surety

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CONFIRMED THE GUARANTEE—Mlusu

Treasury has given Admarc a guarantee to borrow K22 billion from commercial banks to purchase farm produce, Finance Minister Felix Mlusu has confirmed.

The K22 billion guarantee is K278 billion shy of the K300 billion bank surety the once successful state grain marketer is looking for from Capital Hill to recapitalise and jump-start its operations.

Mlusu said on Friday the K22 billion would help Admarc to buy farm produce for its commercial function.

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Speaking when he presented the budget early last month, Mlusu had indicated that government had allocated K10 billion for maize purchase in the 2020/2021 financial year, for the replenishment of the Strategic Grain Reserves.

Mlusu said that it is anticipated that there would be bumper harvest this year due to forecasted good rains as well as the increased coverage of the Affordable Input Programme (AIP).

In an interview, Admarc Acting Chief Executive Officer, Felix Jumbe, described the K22 billion guarantee from Treasury as a working capital.

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Jumbe said the guarantee would help Admarc to buy about 100,000 tonnes of maize to help alleviate hunger this year.

He said the state grain traders would also be seeking another guarantee from Capital Hill for the purchase of 150,000 tonnes of fertiliser for the AIP.

“When you look at these guarantees, they are just working capital. We are just investing in stock which we can sell and give back the money.

“But when we are talking of recapitalisation, we are talking of making Admarc operate at a bigger scale than what it is at the moment. Where we are now, we are underutilising our facilities,” Jumbe said.

He said in the long run, Admarc would still be going to government for recapitalisation.

“We have not yet submitted the proposal for recapitalisation. We will also look for financiers. We can go to the African Development Bank; we can go to [African Export- Import] Bank and there is also the Trade and Development Bank, the one which we used to call PTA Bank.

The K300 billion that we are talking about people think is an extraordinary sum. We are only talking about buying 500,000 metric tonnes of produce,” Jumbe said.

He added: “We are thinking of buying 50,000 metric tonnes of groundnuts, 50,000 metric tonnes of soya, 50,000 metric tonnes of pigeon peas, 50,000 metric tonnes of cotton as well as other crops. Then you would imagine how much exports we would also be doing,” Jumbe said.

Recently, the Centre for Social Concern (CfSC) urged government to ensure that Admarc is well capitalised to perform its functions of ensuring that Malawians have a ready and reliable mark

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