Ministry of Finance has said the government’s decision on whether to bail out the Agricultural Development and Marketing Corporation (Admarc) will depend on the successful implementation of its turnaround strategy.
The parastatal told the Parliamentary Committee on Agriculture recently that it was looking for a K64 billion-bailout from the government before it starts implementing its turnaround strategy.
Speaking in Parliament recently, Finance Minister Sosten Gwengwe said the government was aware of the financial position of Admarc and the need to resuscitate its operations through the implementation of a comprehensive turnaround strategy.
For instance, beginning this financial year, according to Gwengwe, Admarc will be provided with resources for commercial purchases.
Treasury spokesperson Taurai Samuel Banda said K12 billion has been provided to Admarc for maize purchase in the budget.
“The issue is to have a turnaround strategy first; then [the] government will decide on how much should be provided,” Banda said.
In a recent interview, Admarc General Manager Rinho Chiphiko said, right now, the major source of income for the company is the government.
“What you have to understand is that Admarc is a limited liabity company governed by the Companies Act since 2003. However, at the same time, Admarc is owned by government by virtue of being the biggest shareholder. Now what we have done is, for every service we offer to government, we charge them on full course recovery process,” Chiphiko said.
The company plans to commence implementation of the turnaround strategy by setting aside K120 million for feasibility studies for projects expected to expand its agro-processing and value addition activities.
The projects include Maize flour milling pegged at K3.7 billion, seed multiplication at K800 million, rice milling at K1 billion, edible oil production at K2 billion, cotton ginning at K60 million and dahl processing at K150 million.