Admarc wants loan authorisation bills

Agricultural Development and Marketing Corporation (Admarc) has appealed to the Budget and Finance Committee of Parliament to enable the State produce trader obtain loans through loan authorisation bills in the National Assembly.

Speaking on Wednesday in Lilongwe when the parastatal’s officials appeared before the committee, Admarc acting chief executive officer Margaret Roka-Mauwa said loan authorisation bills would enable the institution to perform to the expected standards.

She said in the absence of that, they will continue to be choked with huge debts.

She said Admarc is saddled with debts that come about due to high interest rates in commercial banks.

Roka-Mauwa’s comments follow a K45.2 billion bailout of the parastatal’s loans it got from banks to buy maize which has not been sold to date. The bailout has been undertaken in the current fiscal year.

Minister of Finance, Economic Planning and Development Goodall Gondwe told Parliament that government guaranteed Admarc’s loans in 2015/16 financial year due to the perceived maize shortage in the country at that time, but the maize was not sold due to donations of the grain and other food stuffs and also because the maize sold in Admarc depots was more expensive compared to vendors’ prices.

Unlike Admarc, Roka-Mauwa alleged that other parastatals are treated fairly.

She said: “It is unfortunate that Admarc is where it is because of the conditions put by donors and we usually use borrowed money to function. Why doesn’t Parliament allow Admarc to have loan authorisation bills to work perfectly.

“The interest rates we are charged from the loans we get from commercial banks cannot make us survive in business.”

The committee’s vice-chairperson John Chikalimba welcomed the suggestion from Admarc, saying it is a thing that has been overlooked for a long time.

He said they will follow up the issue to see how they can help the parastatal to access loans from government.

Chikalimba said if they empower Admarc with loans approved by Parliament, rural farmers will be the ultimate beneficiaries as the produce trader will be able to buy directly from the farmers than is the case now.

“They said the resources given to them are not enough and asked us to consider giving them the loans. If their plea is considered, we think it is important and it will help Admarc to buy from the farmers in good time,” he said.

Of the K45.2 billion bailout, K29.5 billion was repaid to CDH Investment Bank, K9.7 billion to Ecobank Malawi, K4.5 billion to FDH Bank and K4.7 billion to Alliance Capital.

Admarc repaid the banks about K3.4 billion of its own resources and is expected to pay back to the government once the 90 000 metric tonnes in its stock is sold this financial year.