The Malawi Government is owing a Zambian firm K3 billion (US$5 905 512) in arrears for supplying fertiliser and seed during last year’s growing season under the Farm Input Subsidy Programme (Fisp).
Minutes of the fourth 2014/15 Fisp meeting held on October 29 2014 in the Ministry of Agriculture, Irrigation and Water Development boardroom and seen by The Nation show that government will pay when funding for arrears is available.
Read the minutes in part: “The ministry reported that on the Zambian fertiliser, about K1 billion [$1 950 000] has been paid and about K1.7 billion [$3 395 413] is the outstanding balance.
“On seed, the ministry reported that there is an outstanding balance of K1 110 215 582.04, which will be settled upon Treasury funding the ministry. Therefore, the total outstanding balance on Fisp is K3 166 858 068.40 [$6 090 111.67]; this is excluding interest claims.”
Ministry of Agriculture, Irrigation and Water Development principal secretary Erica Maganga, who chaired the meeting, confirmed in an interview that there were arrears, but said the Ministry of Finance would resolve the issue.
She said: “Arrears for last year will be paid by the Ministry of Finance, but for this year we are already paying. We have almost K14 billion specifically for that process alone and we are optimistic.”
Ministry of Finance spokesperson Nations Msowoya confirmed the arrears and said government will settle them over two financial years.
Meanwhile, this year’s Fisp—estimated to cost K50 billion from last year’s K60 billion—is already marred by logistical hiccups, including transportation and distribution delays.
According to a report released two weeks ago, government had only managed to dispatch 26 percent of fertiliser needed, which included both 23:21 also known as NPK and Urea, which is applied two weeks after planting.
Thus, out of the 150 000 metric tons budgeted, which translates to 3. 8 million bags, only 40 000 metric tons (or 800 000 bags) have been dispatched.
In addition, donors are demanding urgent information regarding the total estimated costs of the 2014/15 Fisp, which government is yet to provide.
Chairperson of Parliament’s Agriculture Committee, Felix Jumbe, has since warned government that the hiccups could spell disaster for the programme this season.