By Wezzie Gausi:
The Auditor General (AG) has raised questions over the management of K5.3 billion generated from the Affordable Inputs Programme (AIP) after an audit established that the money remained with Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) for more than two years.
The money was supposed to be remitted to the government.
The findings—contained in the AG’s report on government accounts for the year ended March 31, 2024—further show that K1.8 billion of the money was used by SFFRFM to purchase fertiliser for its commercial operations without auditors being provided with evidence of the government’s approval.
The report says the K5.295 billion was collected by SFFRFM on behalf of the Ministry of Agriculture through sales of AIP products during the 2021-22 financial year.
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However, the money was only remitted to the government in January 2024, meaning it remained with SFFRFM for more than two years.
“Funds amounting to K5,295,363,253.65 were remitted to the government by SFFRFM in January 2024 [2023-2024 fiscal year] instead of [the] 2021- 2022 financial year,” the report reads.
The audit further established that while holding the money, SFFRFM used K1.8 billion to purchase fertiliser for commercial purposes from United Arab Emirates-based company Afriventures.
“No evidence was produced to indicate that this was approved by the government through the Secretary to the Treasury despite the SFFRFM writing the ministry to borrow the funds,” the report says.
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The audit also puts the Ministry of Agriculture under scrutiny over its oversight of AIP proceeds.
According to the report, auditors were not provided with evidence showing that the ministry followed up on the K5.3 billion during the entire two-year period in which the money remained unremitted.
Reacting to the findings, Centre for Social Accountability and Transparency Executive Director Willy Kambwandira said the findings raised questions about controls and oversight surrounding AIP.
“It is difficult to understand how we get to a point where K5.3 billion in public funds can remain unremitted for more than two years and part of that money is used for another purpose,” Kambwandira said.
On his part, agriculture policy analyst William Chadza said the audit findings should provide lessons for the management of AIP.
Chadza said AIP remained an important agricultural intervention because of the number of farmers it targets.
“We can only hope for the best, moving forward, and that the programme will be managed in a way that ensures the resources allocated to it serve their intended purpose,” Chadza said.
The K5.3 billion also created an accounting problem in the ministry’s financial statements after it was included in revenue reported for the 2023- 24 financial year despite originating from AIP sales made in the 2021-22 fiscal year.
The Ministry of Agriculture reported K16.99 billion in revenue in its financial statements, but the AG established that the figure included the K5.295 billion collected by SFFRFM from the earlier AIP sales.
The report says this resulted in the ministry overstating revenue for the year under review.
