How Tonse Alliance Govt Stole k30 Billion AIP Fertiliser Funds?

Testimonies on the first day of a public inquiry into the botched K750 million (about $725 000) fertiliser import deal have laid bare disregard of procurement procedures and contradictions among players in the transaction.

The testimony further contradicted President Lazarus Chakwera’s assertion that the payment was an agency fee as Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) board chairperson Marjorie Maluwa Phiri stated that it was actual payment for the fertiliser for the Affordable Inputs Programme (AIP).

She told a Joint Parliamentary Committee probing issues of misprocurement and mismanagement of public resources that the K750 million was paid to assess if the United Kingdom (UK) firm had the capacity to supply 800 0000 metric tonnes (MT) of fertiliser. She said the trial quantity was 25 000MT for which K750 million was paid.

Maluwa Phiri also acknowledged that the procurement process did not follow procedure.

But SFFRFM chief executive officer Richard Chikunkhuzeni said the K750 million payment was made to lock the price.

He said the supplier had given a condition of upfront payment to ensure that the price of $290 per tonne was maintained as prices were going up.

Chikunkhuzeni said procurement procedures were not flouted as the money was just for locking the price.

He said: “At that point, there was no need to engage the Public Procurement and Disposal of Assets Authority [PPDA]. The PPDA was to be engaged after SFFRFM and Ministry of Agriculture assessed the company in UK and checked the quality of the fertiliser.”

However, the duo agreed on the steps being made to recover the K750 million and told the committee that about K187 million ($181 250) had been recovered. They said efforts were underway to recover $543 750 in public funds.

Malawi Government paid K750 million to UK-based Baarkat Foods Limited as advance payment for a fertiliser deal of 25 000 MT. However, the company later failed to deliver and cancelled the deal, a move that irked the President who last week swiftly moved in to fire minister of Agriculture Lobin Lowe and his deputy Madalitso Kambauwa Wirima for purportedly failing to provide leadership.

Maluwa Phiri said the recovered money is in a SFFRFM account and that efforts are being made to recover the rest with the involvement of Attorney General (AG) Thabo Chakaka Nyirenda.

“As of October 25 2022, the Attorney General is in charge of the recovery efforts of the funds assisted by the fund’s external lawyers,” she said.

Maluwa Phiri added that one person has since been arrested in Germany for the botched AIP deal. However, she did not provide details of the person.

On his part, Chikunkhuzeni said the rest of the money was “well- secured” in Germany and that there were efforts to recover it. He put progress towards recovery at 90 percent.

But committee co-chairperson Gladys Ganda said all the money must be recovered as Malawians want to see that their money is accounted for.

“It is good that the money is being recovered. We want all the money recovered,” she said.

In a related development, the Office of the President and Cabinet has terminated the contract of Ministry of Agriculture Principal Secretary Sandram Maweru.

In an interview yesterday, Maweru confirmed his removal from the ministry, but could not give more details.

He said the OPC is better placed to give detailed information on the matter because it is the appointing authority.

“I have left the ministry and I don’t think it’s your interest to know why. So, if you want to know the reasons, call the OPC,” said Maweru.

Secretary to the President and Cabinet Colleen Zamba and Minister of Information and Digitisation Gospel Kazako were not available for comment. The two were reported attending a Cabinet meeting at Kamuzu Palace in Lilongwe