Rest in peace Admarc: You won’t be missed

It is belated, but the year is still fairly fresh, so I will still wish you a happy New Year.

I have to thank my colleague, Eric Mtemang’ombe, for filling the gap that my long sabbatical left and for expanding the column’s fan base with his unique writing style.

Although it is customary to wish each other a joyful and prosperous year, there is little so far that shows that this year will be better than the last—and the last was one of the worst for most Malawians and businesses.

I can still see business as usual in public policy and governance with little or no sign of the change that everyone looked forward to. It seems policy makers and politicians have formed an orchestra that is dancing on the grave where public reforms have been buried.

Businesses are going under. People are losing jobs and few are being created. It is rare to see start-ups and upstarts on the entrepreneurial front as the uncertainty in the business and political climate gives everyone pause.

Even as we come close to the end of Vision 2020 and plot its successor long-term dream, there is little clarity on the next strategic direction as much as folks at the National Planning Commission are working hard to keep the dream planning framework alive.

The fact that the election results stand-off has literally crippled the government system has not helped as no one risks making decisions that may not see the light of day. We are in a catch-22. And it is not fun anymore.

Thus, the same old rot thrives in the comfort of a chaotic governing architecture where everyone can make and rip-up rules as they go.

When a country goes about to subsidise both production and consumption of the same product just know that those trusted with decision-making are as clueless as the next five-year old.

For how do you justify spending more than K30 billion to produce, largely maize, under the Farm Input Subsidy Programme (Fisp) then proceed to allow Admarc not just to borrow heavily on the domestic financial market guaranteed by the taxpayer, but also to pour K5 billion of the same taxpayer into Admarc to buy maize that it later sells at a fraction of the cost price whose loss, roughly K10 billion, is being pushed at, yes you guessed right, the taxpayer! That is a K15 billion consumption subsidy after a K30 billion production cushion of the same product. I mean, what are folks at Capitol Hill high on?

This is the same Admarc that not long time ago had to be bailed out by Treasury to the tune of K45 billion after it failed to repay financial institutions it had borrowed from.

It is the same Admarc whose new acting chief executive officer Felix Jumbe—oddly plucked from the parastatal’s board to be its executive head—says he wants K150 billion to revive this hopeless behemoth of a political apparatus that has bled Malawians dry for decades.

Of the K150 billion; Jumbe wants K103 billion to buy 600 000 metric tonnes of maize to be provided for at mid-year next month.

The remainder—K47 billion—is supposed to go into activities that are hallucinated to turnaround this political tool being masqueraded as a serious corporate entity that can help stabilise prices of agricultural products. How do you stabilise prices of a product you do not even have in your markets?

It was not immediately clear as I was writing this column where Jumbe expects to raise that kind of money.

If it is from government, I don’t see where Finance, Economic Planning and Development Minister Joseph Mwanamvekha will get that war chest outside the current national budget.

I doubt there is any kind of fiscal engineering Treasury can do to free up enough fiscal space for this kind of cash that will only be thrown after bad money.

The Malawi Revenue Authority, even with its cruel revenue collection measures, is struggling to meet its targets.

The weak performance in the real sector—crippled by an economy heading south despite the fairly rosy macroeconomic data—does not give hope.

Government’s attempts to fundraise through higher immigration (passport fees, permits visas), road traffic charges and other non-tax revenue measures will only manage to keep away most people from accessing these services.

If Jumbe hopes to borrow the money from the domestic financial market, he still needs some form of sovereign guarantee, which virtually means that the taxpayer will still have to shoulder the burden as was the case with the K45 billion bailouts.

Such madness cannot be allowed.

Thus, to save the taxpayer the trouble let us give Admarc a mercy death. I doubt there will be many people who will miss it.