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Editorial CommentOpinion & Analysis

Admarc must learn to pay for its debts

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The reservations that the International Monetary Fund (IMF) has expressed about a K45 billion bailout that government extended to the Agricultural Development and Marketing Corporation (Admarc) echo what Malawians of goodwill have always said.

First, The government erred when it adopted a report by the Malawi Vulnerability Assessment Committee (Mvac) that 6.5 million people risked being hit by food shortage. Prompted by this questionable report, the government guaranteed a loan for Admarc from commercial banks.

But Admarc’s inefficiency, coupled with apparent grand corruption at Capital Hill, made it impossible for the grain marketer to timely import maize to sell to the anticipated starving Malawians.

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Because the Mvac figures were cooked up, Admarc did not have any customers queueing for maize at its depots.

Second, the government deliberately ignored the important role that other stakeholders such as non-governmental organisations and development partners play in providing relief food items to starving Malawians.

These two factors made it impossible for Admarc to service the loans it got from commercial banks to import the maize. As a result, interest rates on the loans kept soaring and the government, as a guarantor, had to move in to rescue Admarc.

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But it is clear that if the government stopped unduly influencing Admarc operations, the grain trader would have been running smoothly. the government refuses to commercialise Admarc yet Capital Hill fails to give subventions to Admarc in time. By the time Admarc moves into the market, vendors have already mopped out all the produce that farmers bring.

The government also cripples Admarc by appointing inefficient managers who end up running down the statutory body. Again, the ruling party treats Admarc as its petty cash chest and also abuses its assets for political gains.

If Admarc were to be left to run as a commercial entity, with some social responsibility, the government would not have been required to waste tax payers money to pay for such inefficiencies.

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