Admarc has breached our trust—Treasury

Secretary to the Treasury (ST) Ronald Mangani has accused Admarc of breaching their trust and that of Reserve Bank of Malawi (RBM) for signing contracts with two Zambian companies without their knowledge and blessing.

He said this yesterday when he re-appeared before the joint committee of Parliament probing the deal in which Agricultural Development and Marketing Corporation (Admarc) sought to buy maize from Zambia Cooperative Federation (ZCF) and Kaloswe Commuter and Couriers Limited.

He told the members of Parliament (MPs) on the committee that his office wrote Admarc on July 4 2016 to advise the parastatal on what needed to be followed before and after undertaking the contract.

However, that was 17 days after Admarc had signed the contract with both ZCF and Kaloswe on June 17 2016.

Said Mangani: “Government is an institution of trust. Thus, we never expected that there could be a contract signed before [substantive] issues were addressed.”

At this point, Rumphi East MP Kamlepo Kalua (People’s Party-PP) said time had come for the Treasury to delegate some of its responsibilities to other institutions, particularly on contracts involving huge sums of money.

He feared Malawians could be at pains to trust the Treasury with responsibilities such as coordinating government contracts when other institutions seem to be sidestepping its authority.

But Mangani pleaded with the MPs to allow the “Treasury to continue handling the contracts in the manner it is doing now”.

Karonga Central MP Frank Mwenifumbo (Independent) sought Secretary to the Treasury’s assurance that Admarc would be in a position to repay the loan Parliament approved to allow the parastatal purchase the maize for commercial response.

He expressed fear that the corporation may not be able to repay the loan in the wake of consumers shunning its maize in preference for vendors who are offering cheaper prices.

Mangani agreed with the observation, saying there is need for deliberate measures to be put in place to cushion Admarc so that it is able to recover the money it invested in the maize purchase.

When she appeared before the joint committee early this week, director for debt and aid in the Ministry of Finance, Economic Planning and Development, Madalo Nyambose, said the ministry’s role ended at seeking advice from RBM on a line of credit which Admarc could use after asking for a guarantee from government.

She said the advice was sought on the agreement that Malawi was undergoing a massive shortage of maize and some of the grain would be sourced externally by Admarc for commercial purposes and funds would be recouped through the maize sales.

But the narration of events irked the committee, especially when Nyambose disclosed that the ministry did not follow up on how the $40 million loan facility from PTA Bank to Admarc as approved by RBM had been utilised.

They further queried why the Ministry of Finance, Economic Planning and Development allowed Admarc to deal with RBM after the initial approvals for guarantee were granted.

“Ministry of Finance was not involved in the contract negotiations, neither did we know about the cancellation. According to the nature of the facility, it was not necessary for Ministry of Finance to be involved. The central bank wrote us that we had a running facility with PTA Bank, managed by RBM and Ministry of Finance just recommended that Admarc be allowed to access,” Nyambose said.

Co-chairperson of the committee Joseph Chidanti Malunga, however, pressed the officials quoting two letters seeking no objection from the Office of the Director of Public Procurement, one for Kaloswe and another for ZCF, in which the Secretary to the Treasury was copied. n