The Agricultural Development and Marketing Corporation (Admarc) is facing a tough time to mobilise K95 billion for farm produce purchases from local commercial banks, The Daily Times has established.
In June 2021, the Parliamentary Cluster Committee on Agriculture, Irrigation, Natural Resources and Climate Change asked the Ministry of Finance to allocate K95 billion to Admarc to be used for buying farm produce.
The members of Parliament suggested that K80 billion should be used for buying farm produce while the remaining K15 billion should be used for operations.
Admarc Board Chairperson Alexander Kusamba Dzonzi told The Daily Times that they discussed with different banks and that, although most showed willingness, a few made offers.
He said, so far, NBS Bank has offered K25 billion, MyBucks International has offered K5 billion while Eco Bank has made an offer of between K10 billion and K16 billion.
Kusamba Dzonzi added that National Bank of Malawi made an initial offer of K30 billion before reducing it to K10 billion and latter pulled out while Standard Bank committed to participate only if the loan was given directly to the government.
“Each time we find any more loans, Cabinet will be clearing us. The only problem, as initially foreseen by Admarc Board of Directors, is that our local banks don’t have enough money to lend Admarc to fulfil its turnaround strategy.
“The Minister of Finance has, on the other hand, always assured me personally that the government will always provide funds to Admarc when the need arises. So far, the minister has been faithful to his promise to us and we are grateful,” Kusamba Dzonzi said.
However, impeccable sources in the Ministry of Agriculture said Cabinet, at its recent meeting, rejected Admarc’s proposal to borrow K95 billion from commercial banks to be used for purchasing agriculture commodities.
The sources indicate that the Cabinet approved that the government could only guarantee the parastatal to borrow only as much as K40 billion for the exercise.
“The figure was reduced mainly because most of the commodities, such as soya, beans and rice, have already been cleared on the market and, therefore, the K40 billion could cater for maize purchases,” one source said.
Information Minister Gospel Kazako could neither confirm nor refute the reports.
“Cabinet issues are not discussed in the media. There is a channel Cabinet uses to communicate what it has discussed. You will be taking a big risk to take hearsay as substance. Commenting on this issue will be certification of hearsay, rumour and desperate corporate gossip,” Kazako said.
As of last Friday, Admarc had bought 65,000 metric tonnes of maize valued at over K12 billion.
The corporation’s spokesperson Agnes Chikoko Ndovie said the buying season was still in progress since they have just opened the market to commercial farmers with over 200 bags.
She said they would also be selling the commodity in strategic areas where there is a shortage.
“We do not buy and sell at the same time because of price conflicts. However, in hotspots which are in dire need because they did not harvest enough this season, our markets are open for sales because those markets are not buying,” Ndovie said.
In June, the government stopped Admarc from borrowing K403 billion externally to finance its revamping programme.