Government to buy K28 billion Admarc maize
Government has expressed willingness to purchase maize that the Agricultural Development and Marketing Corporation (Admarc) has in stock to mitigate hunger in the country.
Both Secretary to the Treasury McDonald Mafuta Mwale and Board Chairperson for Admarc Alexander Kusamba Dzonzi confirmed the development in separate interviews.
Last week, Admarc challenged the government to buy all of its maize stocks to offset some of its loans with commercial banks, following the suspension of the $22 million Zimbabwe maize export deal.
Dzonzi said on Wednesday that the State-run grain trader has135,984.49 metric tonnes of the staple grain offered for sale at government’s approved selling price of K205 per kilogramme.
However, Admarc records show that most of the tonnage is committed to a number of financial institutions, with non-committed tonnage standing at 56,000 metric tonnes.
Among some of the committed maize stocks are 43,112 metric tonnes for CDH Bank, 40,000 metric tonnes for NBS Bank and 3,000 metric tonnes for Export Development Fund (EDF), among others.
“The Minister of Agriculture, Minister of Finance and Secretary to the President and Cabinet have advised the Admarc Board to work out modalities with the Treasury to sell the current maize to government for government to stock it with the National Food Reserve Agency (NRFA) to mitigate any hunger eventualities,” Dzonzi said.
Before the sale, however, Dzonzi said they have been asked to commence an audit and reconcile all the debts they have with financial institutions.
“They have asked us to put our house in order and clean the mess, account for all the maize we have by commencing an audit, reconcile all the loans obtained with how much money can be made if all the maize is sold,” he added.
Our calculations, however, show that if sold at government’s selling price of K205 per kilogramme, the corporation will realise slightly over K27.8 billion.
This will mean that Admarc will still have a balance of K44.2 billion of unpaid debts.
Asked if government has money to buy the said maize, Mwale said they will draw the funds from what was allocated in the budget for maize purchases, adding they put a budget of about K12 billion.
“I know that there was a meeting between Admarc, Ministry of Agriculture and the Office of the President and Cabinet.. I know that we have to ask Admarc to take stock of the maize that is available in the country and that they should not sell anything to Zimbabwe because there is a risk of us becoming food insecure…We buy maize every year and money should not be a problem,” Mwale said before asking us to call him later for further details.
This comes at a time cash-strapped Admarc continues to struggle financially in the wake of a suspended $22 million maize sale deal to Zimbabwe, which was allegedly sealed unprocedurally.