The Economics Association of Malawi (Ecama) has expressed worry over how State produce trader Agricultural Development and Marketing Corporation (Admarc) ended up in a K45 billion debt yet the stock it held is of lower value.
Ecama president Chikumbutso Kalilombe said there was need for an explanation from the State enterprise.
In an interview with Business News on Sunday, Kalilombe said it is important to avoid going into the same situation in future.
His comments follow revelations in the Mid-Year Budget Statement delivered by Finance, Economic Planning and Development Minister Goodall Gondwe in Parliament on February 16 that government bailed out Admarc’s K45.2 billion loan.
Admarc acquired the loans from commercial banks to buy maize and other crops last year.
However, Gondwe said Admarc could only sell a small tonnage of the maize that it purchased last season, but a total of 90 000 metric tonnes (MT) of maize remains unsold.
He said: “The bailout has created Admarc indebtedness to the government and, therefore, the 90 000 tonnes of maize could be used to pay in part this indebtedness of K45.2 billion to the government. Arrangements for the payment of the balance will be worked out later.”
But Kalilombe said further explanation from Admarc on how it acquired the maize at such a cost could provide relief to taxpayers.