Experts have urged the government to offload 50 percent stake in Agricultural Development and Marketing Corporation (Admarc) to the private sector to make it more vibrant.
In his presentation to civil society organisations in the agriculture value chain at a meeting organised by the Centre for Social Concern (CfSC) in Lilongwe on Friday, the expert Tamani Nkhono Mvula said with 99 percent shares owned by government, the State-owned produce trader is falling prey to political abuse in decision-making and its capitalisation remains a challenge due to inadequate resources.
He argued that Admarc reforms to separate its social and commercial functions will not bring change if government remains the majority shareholder.
Said Mvula: “The major governance structure challenge at Admarc can be reversed if government reduces its shareholding to 50 percent or below so that it gives more power to other players to participate in decision-making and its operations.
“I believe that this decision will help to build the Admarc that people want.”
He challenged Admarc to be innovative in its operations and service delivery to meet modern demands.
In terms of Admarc’s governance structure, Mvula said the parastatal reports to the Minister of Agriculture and Food Security and the Department of Statutory Corporations which brings confusion.
CfSC executive director James Ngahy, whose institution has been advocating for better markets for smallholder farmers, in an interview backed Mvula’s proposal for partial Admarc privatisation to bring back the lost trust.
He said Admarc needs strong accountability systems and be liberated from political influence.
“As long as politicians who are powerful hold on to the institution and monopolise it, then we will continue crying and fall prey to unscrupulous vendors who dupe farmers,” said Ngahy.
Malawi Economic Justice Network programmes coordinator Mike Banda said partial privatisation of Admarc will help to depoliticise the institution and strengthen its governance structures.
“Year in year out, we allocate huge sums of money in our national budget to support Admarc operations and to bail it out from huge debts which keep piling up,” he said.
Ministry of Agriculture and Food Security spokesperson Priscilla Mateyu in a brief response on Monday said the recommendations will be taken up by the ministry’s management for further consideration.
A week ago, Admarc acting chief executive officer Felix Jumbe proposed recapitalisation of the parastatal through borrowing to revamp its assets, including the processing plants.
The Admarc management also suggested listing the institution on the Malawi Stock Exchange to raise capital and ensure transparency and accountability.