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K1.3 billion debt chokes NFRA

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Denis Kalekeni

By Wezzie Gausi:

The National Food Reserve Agency (NFRA) has disclosed that it faces a K1.3 billion deficit which has negatively affected operations including the procurement of maize as well as debt settlement.

NFRA Board Chairperson Denis Kalekeni told journalists at a press briefing held in Lilongwe Wednesday that the only way out of trouble was a government bailout.

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Kalekeni said accumulated debts included Malawi Revenue Authority remittances such as Pay As You Earn. Other debts are attributed to unsettled utility bills with service providers and employee pension remittances.

“The K1.3 billion is affecting the way the institution is running its programmes. Right now, we are not buying maize because there are no funds and, if the funds are in, we will have to strategise on how best to start sorting out the debt. It is our wish to clear all the debt at once and start all over on a new and clean slate,” Kalekeni said.

Kalekeni also disclosed that, since board members’ appointment in September 2020, they have noted that the agency was suffering from bad governance evidenced by poor utilisation of funds meant for strategic grain reserves for other purposes without the board’s or government’s approval.

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“So, some of the debts are due to abuse of funds by the then board and management during the time there was political interference in the recruitment and running of the affairs of NFRA against trustees [’recommendations],” he said.

Kalekeni also said the institution accumulated debts because of irregular employment on secondment basis.

“For instance, there were two posts of Deputy Chief Executive Officer and Director of Security Services created which are not initially on the organigram of the institution,” Kalekeni said.

He disclosed that, currently, the institution has 59,372 metric tonnes of maize procured in 2020 from 83 cooperatives across the country.

He, however, said the board was yet to receive funds for the procurement of maize and has since redirected farmers to sell their maize to Agricultural Development and Marketing Corporation.

He said, in the 2020-21 budget, the government gave NFRA K7.7 billion for the procurement of maize, a thing that did not happen in the 2021-22 National Budget.

Agriculture expert Tamani Nkhono Mvula said the government should step in to bail out the institution.

“This is disturbing news. The institution is not a profit-making organisation. As such, let the government clear the arrears and let the institution be properly managed by an independent body; for example, a committee of Parliament,” he said.

However, Treasury spokesperson Williams Banda said the government only clears audited arrears.

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