Fisp suppliers owed K11bn
Transporters and suppliers of fertiliser under the 2015/16 Farm Input Subsidy Programme (Fisp) are owed about K11 billion (about $17.5million), a development that threatens the initiative already riddled with logistical bottlenecks.
According to a Fisp Logistics Report dated December15 2015, government was supposed to pay to the suppliers and transporters K10 billion (about $15.9million) after 30 days as stipulated in the contract.
The companies are also owed about K1 billion (about $1.6million) for fertiliser, maize and legume vouchers, bringing the total amount to K11 billion.
The delay, especially on fertiliser suppliers and transporters, means that government will likely bear the interest costs incurred by suppliers as a result of not honouring the contract.
The unpaid suppliers include 21 transporters and 14 fertiliser suppliers, according to the report.
Ministry of Finance spokesperson Nations Msowoya confirmed the outstanding amount. He said government will settle everything once paper work is finalised.
He said: “You see, this is a big programme and it involves a lot of players. It could be that the cheque is somewhere within government, but it does not mean we will not honour the payments.”
On government bearing the costs on interest due to breach of contract, Msowoya said Capital Hill will honour its obligations to Fisp suppliers.
Reads part of the report: “It is understood some K400 million has been made available to [Smallholder Farmers Fertiliser Revolving Fund of Malawi-SFFRFM] for payment of transporters and K11 billion for fertiliser invoices, but, as earlier stated no transporters or fertiliser suppliers have been paid to date.
“In addition, ministry accounts had received K300 million for seed payments, but no seed payments had been made. It should be noted that payment for some of the invoices for fertiliser has been outstanding beyond the 30-day period for payment stipulated in the contract. The provision of adequate finance is required to prevent a repeat of previous years’ payment failures.”
About a month ago, six suppliers refused to sign contracts due to disagreements with government on who should bear the costs of the kwacha depreciation.
The disagreements followed an announcement by Minister of Finance, Economic Planning and Development Goodall Gondwe that the suppliers would be paid in local currency despite buying the commodity in foreign currency.
Government is also yet to pay 2014/15 Fisp arrears amounting to K593 million (about $944,558), excluding accumulated interest. n
