AIP fertiliser contracts raise eyebrows

 Eyebrows have been raised on the huge price differences of fertiliser that some of the 92 companies contracted to supply the commodity for this year’s Affordable Inputs Programme (AIP) are charging.

Government, through the Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM), intends to procure 185 073.33 tonnes of Urea and NPK fertiliser for the programme worth K188.24 billion.

However, the disparity of prices has raised eyebrows as government, in some contracts, will pay as high as K117 000 per 50kg bag while paying as little as K23 962.50 per bag in other contracts.

We randomly picked some companies from the list that was issued by SFFRFM to illustrate how much they are charging government per 50kg bag of fertiliser.

According to the notification of intention to award the contracts to the successful bidders dated October 24 2022 under procurement reference number SFFRFM/2022/2023/01, Paramount Holdings has been awarded the highest tonnage of 13 950.37 tonnes at a total contract price of K12 659 929 012.50.

This means government will, on average, buy fertiliser from the company at K907 497.72 per tonne, translating to K45 374.88 per 50kg bag.

Lab Enterprises has been allocated the lowest tonnage of 100 at a total contract value of K100 million. This means the supplier is charging government K1 million per tonne or K50 000 per 50kg bag.

There are seven suppliers who have been allocated 1 000 tonnes each with one company, Muhiyeni Investments, charging K23 962.50 per bag while the most expensive of the remaining six are Mkay Investments Limited and Hardware & General World, selling at K45 000 per bag.

The most expensive, according to SFFRFM notification include Crack Hardware and General Dealers and Hema Investment who have been allocated 3 345.31 and 513.16 tonnes at a contract price of K5 017 963 000 and K1 206 492 523.55, respectively.

These figures mean Crack Hardware and General Dealers will sell a 50kg bag at around K75 000 while government will pay Hema Investment K117 555.19 for the same bag.

This has shocked Centre for Democracy and Economic Development Initiatives (Cdedi), and has since written Minister of Agriculture Sam Kawale appealing for sanity in the awarding of the contracts.

In an interview yesterday, Kawale, who is also chairperson of the committee responsible for implementation of AIP confirmed receiving the letter, but declined to comment on the matter, saying the ministry “will do a very comprehensive statement when ready”.

But in the letter dated November 3 2022, Cdedi executive director Sylvester Namiwa said what is contained in the SFFRFM notification is a clear case of organised crime to loot, plunder and rip off unsuspecting taxpayers in broad-day light.

“Why is government paying different prices for the same 50kg bag of fertiliser?

“It is very clear that some people sat down and organised themselves to loot public funds,” reads part of the letter.

Namiwa has since demanded the minister to cancel the contracts within seven days and, also, expose those that allegedly sat down and planned to loot public resources.

“In the event of any lawsuits emanating from the cancellation of these botched up contracts, then those who connived to steal taxpayers’ money should be held personally liable for their actions or inactions.

Last but not the least, Malawians demand an assurance that due diligence processes will be conducted in the awarding of the contracts and the implementation of the whole AIP exercise,” says Namiwa in the letter.

Cdedi has since given the minister seven days to respond to its demands.