Questions raised on the whereabouts of K1.3bn maize funding allocated to Admarc

Controversy surrounds the K1.3 billion (about $3.6 million) Malawi Government allocated to Admarc in the 2012/13 budget for maize purchase on behalf of the National Food Reserve Agency (NFRA).

This follows revelations that the corporation has only managed to give NFRA 7 759 metric tonnes instead of 18 000 tonnes.

The revelations, which came out after NFRA and Agricultural Development and Marketing Corporation (Admarc) officials met the Agriculture and Natural Resources Committee of Parliament in separate meetings last week, raised questions among the committee members on whether the allocation was meant to clandestinely fund Admarc operations.

Following its commercialisation, State-owned Admarc is not supposed to be funded from the national budget, but in the 2012/13 budget, Minister of Finance Ken Lipenga announced that government would set aside K1.3 billion for the purchase of maize for the NFRA grain reserves.

Responding to questions from the committee on Tuesday, Admarc management confirmed getting the allocation, saying the corporation managed to buy 18 000 tonnes which have since been delivered to NFRA.

But on Thursday, NFRA management, while confirming that the K1.3 billion was given to Admarc for the stocking purpose, they only got 7 759 tonnes from Admarc.

The 7 759 tonnes meant NFRA was paying about K167 per kilogramme, which is far beyond the maize market price. In essence, K1.3 billion can buy more than 20 000 tonnes.

NFRA chief executive officer Nasimuko Saukira told the committee: “The Ministry of Finance did announce that there was money amounting to K1.3 billion given to Admarc for the purpose of purchasing maize. The arrangement was that Admarc [would] purchase the maize and deposit it [with] us.”

However, Saukira could not be drawn to explain whether Admarc will deliver the rest of the maize to NFRA from the allocated amount or on what could have happened to the balance since he said the agreement was between government and Admarc.

Saukira disclosed that Admarc also owes NFRA almost 10 000 tonnes of maize which it has been drawing from the reserves since December 20 last year.

“By the 24th of this month [January 2013], Admarc collected the entire tonnage [of 10 000]. However, I could not comment on Admarc stocks, if they want more stocks they can be given provided they follow appropriate procedures,” he said, when asked if he was aware that Admarc has run out of maize.

The parliamentary committee summoned NFRA to provide an update of the maize stocks in their facilities.

Saukira said so far there are 58 840 tonnes in five of the seven storage facilities across the country.

He said out of the quantity, about 48 554 tonnes are at Kanengo silos in Lilongwe and Mzuzu has 8 897 tonnes whereas Limbe and Bangula warehouses have no maize in stock.

Saukira told the committee that initially the reserves had 115 000 tonnes, of which the 10 000 were released to Admarc and 25 000 tonnes were part of 75 000 tonnes for relief that were released to the World Food Programme (WFP) and the Department of Disaster Management.

“Currently, the agency is releasing the second tranche of 50 000 metric tonnes [from the 75 000 metric tonnes] which has been sponsored by the governments of Ireland and Norway. The whole 75 000 will have been released by 31st March 2013,” he said.

Saukira said the 75 000 tonnes was meant for the 1.9 million people who were identified by the Malawi Vulnerability Assessment Committee (Mvac) report of June and October 2012 as in need of food aid.

He said in line with Strategic Grain Reserves (SGR) drawdown regulations, all the maize being released will have to be replenished by the concerned sponsors using this year’s maize harvest.

Saukira was optimistic that the maize in the silos at the moment is enough to take the country through to the next harvest.

During the meeting, committee members also wanted clarification on whether the maize being distributed by President Joyce Banda is from the silos and if that is the case, why is it that the bags are labelled with the name of the President.

Saukira said all he knows is that out of the 50 000 tonnes, 2 700 tonnes is meant for the Office of the President and Cabinet (OPC) for emergencies such as hailstorms or floods.

“On the distribution aspect of the President, I would not be able to comment because I will only be speculating. I don’t go as far as the distribution point. Our role starts and ends where we are,” he said.

We could not clarify with Admarc on the issues raised.