State-owned Agricultural Development and Marketing Corporation (Admarc) has rebuffed calls to disclose the source and terms of a $548 million (K423 billion) loan it has secured to boost its operations.
The snub comes after Centre for Social Accountability and Transparency (Csat), which fights against public funding abuses, wrote the parastatal demanding it to remove the veil of secrecy surrounding the funds.
Admarc board chairperson Alexander Kusamba-Dzonzi announced the securing of the funds last month, without giving any details.
That time, Kusamba-Dzonzi also unveiled the company’s vision, which includes setting up a textile, surgical wool and cooking oil processing plants.
In a letter dated March 1 2021, Csat presses Admarc to explain whether the K423 billion is a loan facility, and if it is, what are the terms and conditions?
“In case this is a loan, explain what measures Admarc has put in place to make sure that the funds are repaid without putting unnecessary burden on Malawians,” reads the letter, in part.
Csat says it is concerned about public companies’ borrowing, which affects the taxpayer when they fail to service the loans.
The letter, which its executive director Willy Kambwandira signed, further stipulates: “Our concerns also come hot on the heels of continued borrowing of government institutions without a clear plan on how they intend to use the funds and repay the loan.
“Please be informed that failure to disclose this information has the potential to raise speculations of some underhand corrupt dealings with this funding facility. You may wish to be reminded that Admarc is a government-owned corporation, run by taxpayers’ money, and in the event that it fails to settle this loan, Malawians will have to foot the bill.”
In a response to the letter, the Admarc board chairperson only confirmed that the funding was a loan, but was coy to disclose the financier.
“Admarc, indeed, has secured $548 million to fund various projects in our quest to revamp Admarc to improve the economics of the smallholder farmers once more. Admarc will reveal the source of funding after the Ministry of Finance approves the integrity of the financier,” said Kusamba-Dzonzi in his letter of March 7 2021.
In an interview on Sunday, Kambwandira said they were not impressed with Admarc’s response, arguing that the parastatal was supposed to wait for the ministry’s approval before announcing that it has secured the funds.