Farmers lament slow proceeds settlement


By Chimwemwe Mangazi

Some tobacco growers have bemoaned delays by banks to give them proceeds after sale of their leaf at the auction floors.

Those that confided in Times Business indicate that it has now taken two or three weeks without receiving their money after they sold their tobacco.


This is in contrast to Section 78(3, h) of the Tobacco Industry Act, which stipulates that payments to growers be made within 24 hours of the sale.

This, the farmers allege, is due to the Reserve Bank of Malawi (RBM)’s move to have 30 percent of all foreign exchange revenue from the tobacco sales.

But RBM spokesperson Ralph Tseka feigned ignorance on the matter, asking for more time before commenting.


Madalitso Bola, a farmer from Gogodi, said he sold 44 bales of tobacco at Chinkhoma Auction Floors in Kasungu District on May 13 but was yet to receive payment.

“This is very inconveniencing. Today they tell us the dollars are not yet in; tomorrow they say the Kwacha is not yet in and we wonder what games they are playing,” Bola said.

President of the Tobacco Association of Malawi (Tama) Trust Abiel Kalima Banda indicated that the association has received complaints from farmers on the matter and has since contacted authorities who are working on the same.

JTI Malawi Corporate Affairs and Communications Director Limbani Kakhome said the firm has noted the problem as its system monitors, on a daily basis, the payment turnaround of its transactions with AHL, processing banks and ultimately growers.

“Payments are sometimes being delayed up to 15 days and we sympathise with growers on this matter. The recent RBM directive on how tobacco dollars should be transacted between AHL, RBM and commercial banks seems to have introduced extra layers of transactions that are slowing down the processes between the three institutions,” Kakhome said.

He said, apart from the payment delays, growers are also being negatively impacted because, unlike in the past, the exchange rate being applied to them is lower than what they would ordinarily have enjoyed.

Market operator, AHL Group, however, dismissed the assertions saying the only delays that could be there could stem from interbank transfers.

AHL Group General Manager Graham Kunimba said the situation cannot take three weeks to rectify.

“If there are any delays it must be within the banking systems but our system; is an electronic system, once we have sold tobacco today, before end of day tomorrow we would have credited the grower’s account through various banks.

“We have got our main account held at National Bank and we issue instructions through that banker, who then makes payments to various bank accounts [belonging to the farmers],” Kunimba said.

Tobacco Commission Chief Executive Joseph Chidanti Malunga said the problem was not very big but it stemmed from confusion on implementing the directive from the RBM.

“There was a lag between RBM sending that money to commercial banks and also, at the beginning, banks were not sure of what to do. For example, they get 70 percent from AHL and 30 percent from RBM; at what point should we pay the growers? Should we wait for RBM? So, all of that created confusion.

“Yesterday we had a meeting with all the stakeholders and we have ironed out all the confusion and now the transfers will be done electronically and we want the payments to reach the farmers within 24 hours, latest 48 hours,” Malunga said.

Facebook Notice for EU! You need to login to view and post FB Comments!
Show More

Related Articles

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker