Extra K124bn needed for AIP
Ministry of Agriculture says it needs an additional $121 million (about K124 billion) to ensure that all 2.5 million targeted beneficiaries of this season’s Affordable Inputs Programme (AIP) get subsidised inputs.
The ministry’s director of finance Teresa Mkandawire said this at Parliament Building in Lilongwe yesterday when ministry officials met the Budget and Finance Committee of Parliament.
She said: “In terms of the extra forex that we may need, if at all we may meet the target of 2.5 million beneficiaries, we are looking at about $121 million. That is in addition to what has already been paid. The decision is yet to be made because we have just referred it to Treasury.”
Mkandawire said the K109 billion that was initially allocated to AIP in the 2022/23 National Budget is not enough and the ministry has engaged Treasury on the way forward.
She said: “The ministry has exhausted the budget for fertiliser which was pegged at K97.5 billion and it has also used K3.3 billion of the K4.4 billion meant for logistics.
“Even the letter s of credit that the Smallholder Farmers Fertiliser Revolving Fund of Malawi [SFFRFM] had arranged earlier to pay suppliers of fertiliser was not enough.”
Mkandawire said the facility of $150 million was made before a decision to leave out other companies in the management of AIP was made.
She also told the committee that out of the K97.5 billion allocated for A IP, SFFRFM paid a debt of K19 billion for last year’s programme that it owed Malawi Fertiliser Company.
Mkandawire said Malawi Fertiliser Company demanded a settlement of its money before it can blend 10 000 metric tonnes (MT) raw material for fertiliser that Morocco donated to Malawi to produce 52 000MT of fertiliser.
Ministry of AgriculturePrincipal Secretary Dickxie Kampani said price changes in commodities have heavily affected the programme and he feared that the target for this year might not be met.
To date, he said only 55 percent of AIP fertiliser has been redeemed. As of January 17, a total of 2 742 207 bags or 137 110.35MT were redeemed against a target of 247 384MT.
Budget and Finance Committee of Parliament vice-chairperson Ralph Jooma has since cast doubt if the $121 million will be secured, saying it is clear that government will not cover all intended beneficiaries.
He said the programme will likely need more money for transporting of fertiliser, adding there is already an indication of K11 billion for additional transportation.
Jooma also wondered why K19 billion from this year’s programme was used to settle an old debt.
However, he said the committee will engage Treasury to ensure that there is additional allocation to AIP for more farmers to be reached with fertiliser.
According to the ministry, this year’s AIP has faced various challenges including delays in approval of procurement by PPDA, with some suppliers still waiting for letters of credit before they can release any fertiliser that is already in the country.
