AIP’s merry go round
With Capital Hill giving room to the suppliers to provide the commodity by February 15 as per the outcome of the review meeting by the PPDA, the public’s curiosity has been aroused as the country’s Agriculture Minister had indicated
In the latest of the many dizzying developments around over the 2022–23 Affordable Input Programme (AIP), government is to re-offer 30 companies fertiliser supply contracts which it cancelled last year, Malawi News has learnt.
The about-turn comes after the companies dragged the government to court last year for cancelling the contracts.
In November, the Ministry of Agriculture, through SFFRFM [Smallholder Farmers Fertilizer Revolving Fund], cancelled the contracts for 92 firms to supply 185, 000 tonnes of AIP fertilizer.
The cancellation came amid revelations that the Ministry of Agriculture had, through SFFRFM, been duped K750 million which it paid to a British firm, Barkaat Foods Limited, to supply 25,000 tonnes of fertilizer for the programme.
Barkaat, which had said had a production line with globally renowned fertiliser maker Yara UK, terminated the contract after pocketing the money.
SFFRFRM cancelled the contracts after President Lazarus Chakwera criticised the ballooning of the budget to K188.24 billion for fertilizer supply alone for a programme that was budgeted at K109 billion.
When government cancelled the contracts, 30 companies asked the Public Procurement and Disposal of Assets Authority (PPDA) to review the decision.
The firms, through Kita & Company, then dragged PPDA and its director general to court for not acting on their application for it to review SFFRFM’s decision to cancel their contracts after getting a PPDA No Objection.
But as the case was commencing in court, PPDA wrote the companies that it was in the process of instituting a review committee to look at their application.
“I write with reference to an application for review dated 24th November 2022 which you submitted to the authority on behalf of 30 applicants who were among the 92 successful bidders in the cancelled procurement proceedings as provided in the notice of cancellation of the said procurement proceedings dated 11th November 2022.
“Kindly be advised that the authority is in the process of constituting a Review Committee to hear your application,” reads a letter authored by PPDA director general addressed to Kita.
Now the outcome of that review is that government will offer contracts to the 30 companies, according to lawyer representing the companies Wapona Kita.
“My clients (suppliers) had a meeting with the authorities and they have confirmed to reverse their decision and allow them to supply fertiliser by 15 February,” Kita told Malawi News.
According to Kita, this means the matter is no longer going to be heard in the courts.
PPDA, through its spokesperson Kettie Kujaliwa, said Friday that what it held was an administrative review hearing (“not a meeting”) following an application by the bidders.
A report will have to be submitted to the director general on the recommendations, she said.
“This is a normal procedure according to Sections 59 and 60 of the PPD Act,” Kujaliwa said.
“The determination of the Review Committee is not yet out. The facts of the matter shall be known when the Review Committee submits its determination to the DG.
“Take note that an Administrative Review process is independent of the court case you made reference to. Hence, being held as such and the initiation of the Administrative Review started before the court case,” Kujaliwa said.
However, Willy Kwambwandira of the Centre for Social Accountability and Transparency, has described this new development as suspicious.
He calls it “a gimmick to siphon tax payer’s money”.
“Obviously this does not sound good. We all know that government announced that last bags of AIP fertilizer will be delivered by end of January so one wonders which AIP supply are they talking about? Where are they going to supply the inputs? Why are they agreeing now, and what have they agreed? There are so many unanswered questions on the matter.
“We suspect this could be a fast way of siphoning tax payer’s money because it is likely some suppliers will be paid for supplying nothing,” Kambwandira said.
Recently, Minister of Agriculture Sam Kawale said in Mzimba where he was visiting some AIP sales points that government would close AIP sales on January 31.
All along, even after the cancellation of the contracts for the 185,000 tonnes, government has been saying that it has enough stocks of fertilizer to cater for all the 2.5 million beneficiaries targeted for the programme this season.
On Thursday, The Nation quoted the Ministry of Agriculture as saying 66 percent of the 2.5 million beneficiaries of the Affordable Inputs Programme (AIP) have redeemed their inputs. That means 825 000 are yet to access maize seed and fertiliser.
The reported referred to an earlier statement by Ministry of Agriculture Principal Secretary (Technical Services) Medrina Mloza Banda assuring the nation that there was enough fertiliser in SFFRFM warehouses.
“Ten thousand metric tonnes was donated by Morocco as raw material to be blended to make 52 000 MT of fertiliser and we had another 20 000 MT of fertiliser, which is a loan from African Development Bank (AfDB) and that gives us about 70 000 MT.
“The 2.5 million beneficiaries require about 250 000 MT of fertiliser so if you subtract the 70 000 MT, the remainder is what government bought,” it quoted her as saying.
The AIP this year has been some merry go round.
The Ministry of Agriculture said two weeks ago that the K109 billion for this season’s AIP has been exhausted and it needed extra K124 billion to finalise the activities under the programme.
When Finance Minister Sosten Gwengwe announced the K109 billion allocation in February 2022, he did not give figures of beneficiaries as it used to be the case.
And amid the delays for the programme to start, allegations cropped up that government had been swindled K30 billion in a fertilizer purchase deal gone wrong.
The Ministry of Agriculture rejected this claim in a statement in which it also disclosed the amount of money it had lost was K750 million.
The non-performance of the programme led to the sacking of Lobe Lowe as Minister of Agriculture and Sandram Maweru as Principal Secretary in the ministry.
The programme also became subject of an inquiry by a committee of Parliament. The report of that inquiry is yet to be made public.