The Agricultural Development and Marketing Corporation (Admarc) says it needs $300 million (about K222 billion) for recapitalisation to ensure seamless and profitable operations of the State produce trader.
Admarc acting chief executive officer Felix Jumbe said this on Thursday in Lilongwe when the parastatal’s management met four parliamentary committees, namely Agriculture and Food Security, Budget and Finance, Industry and Trade and Public Accounts.
In April this year, Admarc also indicated that it wants to borrow K100 billion from Export Development Fund (EDF), a development finance institution, to revamp itself as a serious business entity.
Jumbe said government, as a majority shareholder, cannot manage such huge capital injection; hence, external financing would be ideal through Parliament’s Loan Authorisation Bill.
“This [the money] would ensure buying from the farmers at government set minimum prices legumes, cotton and at least 500 000 metric tonnes of maize to be traded on commercial basis to ensure commercial visibility of Admarc,” he said.
Jumbe said the loan sourced through Parliament would be repaid to the external financiers over a period of time, adding that institutions such as water boards have benefited through parliamentary borrowing for commercial projects.
He said: “We can raise money on our own as a limited company, but that will be limited to our assets that we can pledge as collateral for loans.
“Alternatively, we can raise capital through listing on Malawi Stock Exchange if government relinquishes current 99 percent of its shares to the public.”
Speaking on behalf of the parliamentary committees, Agriculture and Food Security Committee chairperson Ulemu Chilapondwa said they support of Admarc’s resolve for recapitalisation, adding that farmers are suffering because of the institution’s inefficiencies and lack of sound capital.
“The institution needs to be operational all year round to buy farm produce from farmers at minimum prices and also to be selling farm inputs to farmers,” he said.
In the 2020/21 National Budget, Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said Admarc has been allocated K10 billion for the purchase of maize, legumes and cotton.
He also said Admarc will be allowed to borrow from commercial institutions.