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MPs grill Goodall Gondwe on Admarc

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Pressure continues to mount on Minister of Finance, Economic Planning and Development, Goodall Gondwe, over a K45.2 billion bailout to the Agricultural Development and Marketing Corporation (Admarc) which had obtained domestic loans for maize purchase.

The grain trader’s former chief executive officer, Foster Mulumbe, once told Parliament that Admarc was failing to sell the maize that it had bought using the loans.

This was apparently due to the fact that the 2016/17 hunger situation had been exaggerated such that it later transpired that Malawians did not look up to Admarc for their staple food.

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Malawi Congress Party (MCP), the People’s Party (PP) and the Budget and Finance Committee of Parliament yesterday queried the arrangement through which the Admarc bailout had been done which, they argued, was irregular.

According to the three entities, Parliament was supposed to be informed about the bailout in line with the Public Finance Management (PFM) Act.

Reacting to the budget statement which Gondwe delivered on Friday, MCP spokesperson on finance, Alexander Kusamba Dzonzi, argued that, by settling the Admarc loan outside the National Assembly, Gondwe departed from the policy principles of responsible fiscal management.

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“The Minister of Finance is, however, sufficiently warned [in Section 12 (3) of the PFM Act] that he can only depart from the principles of responsible fiscal management specified in subsection 2 only in cases of exceptional circumstances.

“He is further ordered that such a departure must be temporary, reasons, justifications and details for doing so and the approach to be taken to return the fiscal principles be specified.

“MCP has failed to see any exceptional circumstances that would have forced our experienced Minister of Finance to depart from the principles of responsible fiscal management except that he has been forced to settle this loan to reward the ruling elite in DPP [Democratic Progressive Party] who are the true beneficiaries of the taxpayers’ money,” Kusamba Dzonzi said.

He added that despite the law ordering a minister of Finance to disclose to Parliament the exceptional circumstances that made him move away from the principles of responsible fiscal management forthwith if the assembly is in session or at the commencement of the next session, “MCP has never seen [Gondwe] doing any of what the law orders him to do”.

According to MCP, even if Cabinet approved the bailout, Parliament was still supposed to be informed about the decision.

“…Under the circumstances, are the actions and decisions of the Minister of Finance regarding the Admarc K45.2 billion bailout still legally binding? Malawi Congress Party does not believe that the guarantee given to Admarc was in the first place done in good faith,” Kusamba Dzonzi said.

On his part, PP spokesperson on finance, John Chikalimba, also took a swipe at the bailout, echoing his MCP counterpart’s concern that Parliament had not been informed about the decision.

He said: “This is very sad. As People’s Party, we are saddened that the bailout was only approved by Cabinet and not Parliament… This House had told Admarc to sell the maize, but behind our back, the Minister of Finance has bailed out Admarc.”

Chikalimba further criticised Gondwe for initially painting a rosy picture of the country’s economic progress “when in reality, it was clear that many things would not work”.

Chairperson of the Budget and Finance Committee, Rhino Chiphiko, also condemned the bailout on the premise that, among other things, the government was not supposed to authorise the loan as there was no hunger in the country.

According to Chiphiko, the whole arrangement was calculated corruption.

The issue surrounding the Admarc bailout was first exposed by Member of Parliament for Nkhotakota South East, Everson Makowa Mwale, during the November meeting when he told the august House that he had evidence of the payouts.

Gondwe admitted that the bailout had indeed been done.

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