As the parliamentary inquiry into the manner in which Agricultural Development and Marketing Corporation (Admarc) procured maize from Zambia entered a third day yesterday, the Malawi Revenue Authority (MRA) contradicted Admarc on the quantity of maize Zambia Cooperative Federation (ZCF) supplied to Malawi.
While Admarc chief executive officer (CEO) Foster Mulumbe on Wednesday told the Public Accounts Committee and the Parliamentary Committee on Agriculture, Irrigation and Water Development that ZCF had, by December 31 2016, delivered 4 512 metric tonnes (MT), MRA commissioner general Tom Malata told the same committee yesterday afternoon that only 4 210 MT went through their system.
The authority’s commissioner for customs and excise Fatch Valeta disclosed that 150 transporters, of whom 25 are Malawians, were recorded as having ferried the maize into Malawi.
The other contradiction was on the name of the institution importing this maize.
While Mulumbe stated that the imported maize was destined for Auction Holdings Limited (AHL), MRA stated that their documents indicate that Admarc was the importer and all the maize went to the corporation.
In his reaction, the committee’s co- chairperson Joseph Chidanti Malunga said they were not impressed with the information MRA provided them.
Said Malunga: “We are not impressed with what they said in terms of matching the figures they said against what Admarc said. But as far as they are concerned, that is what they have in their system.
“As you know, they said the [quantity] of maize that passed through their borders between the said period is about 4 210 metric tonnes. Yet, Admarc told us that it was 4 512 metric tonnes. So, we are wondering why the difference because if Admarc was giving us figures, it must have quoted those figures from MRA.”
He said his committee will summon AHL officials next week to explain their side of the story.
“We have to establish what exactly happened and probably physically verify where the maize is,” said Malunga.
Meanwhile, MRA has assured the MPs that it will not give Admarc a release order to pay the supplier until the remaining tonnage is delivered in full.
When the Ministry of Finance appeared in the morning, the committee faulted the ministry for their hands off approach in the deal.
The bone of contention is the pricing for maize which Admarc planned to buy from ZCF at $34.5 million when an initial agreement with Kaloswe Commuter and Courier Ltd allegedly pegged the price at $21 million for 100 000 metric tonnes.
Mulumbe had on Wednesday told the public that the Kaloswe contract was cancelled because they discovered that Kaloswe did not have any maize in stock and the $215 per tonne price was based on delivery from the northeastern province of Zambia while the delivery from Lusaka was pegged at $345 per tonne.
But director for debt and aid in the Ministry of Finance, Madalo Nyambose, said the ministry’s role ended at seeking advice from the Reserve Bank of Malawi (RBM) on a line of credit which Admarc could use.
Nyambose said the advice was sought on the agreement that Malawi was undergoing an acute shortage of maize and that Admarc would source the grain externally for commercial purposes and funds would be recouped through the maize sales.
But the committee was irked when Nyambose disclosed that the ministry did not follow up on how the $40 million (about) loan facility from PTA Bank to Admarc, as approved by RBM, had been utilised.
“Were you told about the cancellation of the contract from Kaloswe to ZCF? Did PTA Bank consult the Ministry of Finance on the cancellation of the first Letter of Credit and issuance of the second?” queried Dowa East legislator Richard Chimwendo Banda.
He further queried why the Ministry of Finance allowed Admarc, a parastatal, to deal with RBM after the initial approvals for guarantee were granted.
“Ministry of Finance was not involved in the contract negotiations; neither did we know about the cancellation. According to the nature of the facility, it was not necessary for Ministry of Finance to be involved. The central bank wrote us that we had a running facility with PTA Bank, managed by RBM and Ministry of Finance just recommended that Admarc be allowed to access,” Nyambose said.
Co-chairperson of the committee Joseph Chidanti Malunga, however, pressed the officials quoting two letters seeking no objection from the Office of the Director of Public Procurement, one for Kaloswe and another for ZCF, in which the Secretary to the Treasury was copied.
Karonga Central MP Frank Mwenifumbo was particularly surprised that Ministry of Finance could play a hands off role when the implications of the cancellation of the contracts would have legal and financial consequences which would spill over to the central government.
After much pressure, Nyambose agreed with the committee that as guarantor of the loan, the Ministry of Finance would be responsible for repercussions if Admarc defaulted and should have followed up what agreements the grain trader was entering into.
The committee has resolved to recall officials from the Ministry of Finance to guarantee the presence of the Secretary to the Treasury and budget director as well as officials from the ODPP and Admarc. n