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‘Cartel frustrates Admarc operations’

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Rhino Chiphiko

Newly appointed Agricultural Development and Marketing Corporation (Admarc) General Manager Rhino Chiphiko has told the Parliamentary Committee on Agriculture that there is a cartel that is frustrating the operations of the grain marketing company.

Chiphiko disclosed, in Lilongwe Thursday, that the cartel is made up of officials from commercial banks, Admarc, ministries of Finance and Agriculture as well as the Reserve Bank of Malawi.

He said the cartel wants to keep the corporation in debt so that they benefited from it, citing the blocking of the recapitlisation process.

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He also said from the K95 billion that Admarc has been permitted to borrow from commercial banks for maize purchase, it had managed to borrow only K25 billion, which has not even been given to it.

“All the loans we acquire are in collateral arrangements, whereby all the maize we buy belongs to the banks; So Admarc is working for the banks in a way.

“When we talk of issues of transportation, issues of fumigation, issues of storage, Admarc does all that but, in addition, Admarc is also charged interest at the rate of 17 percent. So when you look at it as a package it is true that there is a third force operating and probably the cartel exists between the bank, the ministry and some individuals,” he said.

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He claimed that the Strategic Grain Reserves (SGR) has 36,000 metric tonnes only while Admarc has 92,000 metric tonnes which are under collateral arrangements.

Chiphiko’s sentiments were echoed by committee chairperson Sameer Suleman.

Suleman said the committee had proposed to the Ministry of Finance that Admarc be given the full amount of money it asked for.

“However, the ministry reduced the amount, which raises some suspicions,” he said.

The committee chairperson said they never wanted Admarc to borrow money from local banks because “that is where the problem is. There is a cartel”.

The committee chairperson claimed that “There is a big cartel [that is there] to siphon money from Admarc. No one wants to give Admarc [money] so that Admarc can stand on its own because they want to satisfy their interests first,” Suleman said.

He said there was a need to allow the national grain trader to recapitalise other than forcing it to borrow money from local banks as it would be easy for interested parties to get commission

“Big ministries are doing this. We have that information. We will reveal the names. We are tired of this. Time [to spill the beans] is coming,” Suleman charged.

Both Suleman and Chiphiko said, at one time, Admarc found a financer who was willing to lend it K500 million with a grace period of one year but the move was blocked.

Admarc needs K500 million to venture into income-generating activities including milling and cooking oil production.

During the meeting Chiphiko said it is doubtful that the country has one million tonnes of surplus maize as the corporation is failing to buy the commodity on the market.

He said, for example, that the grain marketer was not buying maize in the Southern Region because there is no grain on the market, indicating that maize was being bought in the Central and Northern region only.

“I doubt very much that, after exhausting the maize in the market, we should be able to acquire the one million [tonnes] being mentioned. We, as a country, need to tread very carefully. The figure that we are talking about might not be realistic,” he said.

“They are lying that we have over one million tonnes of surplus maize. It is a lie. Where is the maize? Let them show us. There is no maize,” he said.

Suleman said committee members would meet with President Lazarus Chakwera to give them a true picture of the situation.

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