A firm which government paid K750 million for the supply of fertiliser under the Affordable Inputs Programme (AIP) terminated the contract before supplying the commodity – but after pocketing the money.
Ministry of Agriculture disclosed this in a statement it released Thursday.
The statement comes after a month or so of allegations, largely on social media, that government has been swindled K30 billion in the deal.
However, the ministry denies this loss in the statement, which Principal Secretary Sandram Maweru has signed.
But the ministry says the United Kingdom (UK) firm, Barkaat Foods Limited, failed to supply 25,000 metric tonnes of fertiliser after government paid it K750 million.
Maweru said the ministry had engaged Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) to process the procurement for AIP this year.
According to Maweru, SFFRFM engaged Barkaat Foods Limited, which he said had a production line with a well-known supplier, Yara Limited.
SFFRFM was asked to pay K750 million to lock the price, which it did. After pocketing the payment, the company terminated the contract.
“Barkaat Foods Limited failed to supply and consequently terminated the contract citing loss of production line at Yara UK and that they could no longer commit to supply the fertiliser,” the statement reads.
According to Maweru, the company agreed to transfer back to Malawi K750 million through the same Ecobank through which it was paid.
“This advance commitment fee payment of about K750 million is under recall by Ecobank and will be received by the end of this month of October 2022,” the statement further reads.
An internet search on Barkaat Foods Limited gives a number of entries for the firm, including that of a slaughterhouse based in the UK which has in the last three months undergone dissolution.
Also in circulation on social media is a purported gazetted publication, dated June 28 2022, which indicates that the company would be struck off the register in less than two months from the date in question, which technically means presently the company does not exist.
We have not established the authenticity of these documents.
SFFRFM Chief Executive Officer Richard Chikunkhuzeni refused to comment when The Daily Times contacted him on the matter Thursday.
“[We] will comment later or better still the PS [Principal Secretary] to…all is well,” he said.
But the revelations have riled Human Rights Defenders Coalition (HRDC), which has issued a statement in which it says the ministry’s statement raises a lot of questions.
“Where was the call for tenders flighted? What criteria was used? Where is the Public Procurement and Disposal of Assets Authority in all this? What prompted the government to use this model of secret procurement?” HRDC queries in a statement.
HRDC further wonders whether government carried out any due diligence at all on the company.
It also demands that government should provide answers as to how much the whole deal was worth since it says the K750 million is an initial deposit.
“We feel that this alleged scam is reckless and embarrassing to the government,” says HRDC in the statement.
The coalition’s chairperson, Gift Trapence, said the organisation is disturbed by the statement from the ministry seeking to clear the air on the K30 billion fertiliser scam allegation.
He said the statement smells of attempts by the government to cover up the depth and gravity of the issue.
The organisation has since called upon President Lazarus Chakwera to take immediate action on those responsible to ensure that those responsible for this botched deal are taken to task.
Alongside social media circulations, chairperson for the Parliamentary Committee on Agriculture Sameer Suleman has regularly made allegations of the K30 billion loss.
This is the first time that government has issued a statement in response to the matter.