It has been learnt that Zambia Cooperation Federation (ZCF) can still claim payment of maize shipped so far in the country despite expiry of a letter of credit which necessitates payment.
FDH Bank yesterday afternoon appeared before the joint committee for the inquiry into the maize deal between Agricultural Development and Marketing Corporation (Admarc) and Zambia.
FDH Trade and Corporate Banking Manager, Kondwani Mawerenga, said Admarc can still facilitate payment of the 4,224 metric tonnes that ZCF delivered so far in the country as the letter of credit expires on January 30, 2017.
Mawerenga explained that December 31 was last date for shipping of maize in the country while period for payment of the same expires on 30 January 2017.
“The letter comes with two conditions stating the last date of shipping and its actual lifespan and in this case is January 30. This means ZCF can claim its payments even if it delivers 1,000 metric tonnes,” he said.
This is in conflict with Admarc which said payment can be done at least if the ZCF suppliers more than 10,000 metric tonnes.
Malawi Revenue Authority said payment will only be made upon issuing a release order which can only be done if ZFC delivers all the 100,000 metric tonnes.
But Mawerenga said the FDH does not have contract that stipulates such conditions but repeatedly said according to what is on the letter of credit, payment can be done.
“We have learnt that in newspapers. We are blind on that. The letter of credit does not indicate that. Therefore, ZFC has the liberty of claiming their payment,” he said
He further disputed that the Bank is a representative of PTA bank and said it deals with Admarc and Reserve Bank of Malawi (RBM).
Chairperson of the committee, Joseph Chidanti Malunga, acknowledged the contradicting information on the matter and said the committee is now clear that the money has not yet been paid.
“What we wanted is to find out from the bank if the money was indeed paid and we have learnt that the has not yet been paid,” he said
Earlier, the committee met National Food Reserve Agency (NFRA) which distanced itself from the Zambia maize deal, arguing that its mandate was to buy maize locally for food response distribution programme.
NRFA Chief Executive Officer, Nasinuku Saukira, told members of the joint committee that it never imported any bag of maize outside the country and that all the 92,000 metric tonnes have been procured locally.
He further acknowledged receiving overwhelming response from suppliers, especially smallholder farmers despite Malawi Vulnerability Assessment Committee Report predicted a huge deficit of maize tonnage in the country.
He said the procurement exercise was oversubscribed and that many suppliers are still asking another opportunity to trade their produce.
According to NFRA, the reserves have 52,297 metric tonnes of maize.
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