Govt handpicks bidders for AIP

 For the first time, government has opted to use restricted tendering in the procurement of fertiliser under the Affordable Inputs Programme (AIP) instead of the open tender system, a move that has irked some stakeholders.

Minister of Agriculture Sam Kawale confirmed in an interview on Tuesday that the procurement process for the 2023/24 fertiliser contracts is almost finished, stating that the new arrangement was chosen to expedite the procurement process.

But chairperson for the Parliamentary Committee on Agriculture Sameer Suleman has described the process as fishy, arguing that it is prone to abuse as government may deliberately award contracts to those close to the ruling party.

He demanded the Ministry of Agriculture to produce the list of the suppliers for scrutiny.

Said Suleman: “Let’s be transparent and accountable to Malawians; how were the suppliers identified in the first place. It looks like the Executive can now do anything without following practice and laws. If the requirements were not satisfied then the exercise should be reversed.”

He observed that in previous contracts under open tendering, some suppliers duped government but argued that restrictive tendering is more prone to abuse.

Kawale said the public has been complaining about delays to procure the commodity hence government’s decision to only deal with suppliers that have a good track record.

He could not, however, disclose which suppliers or how many have been approached for the exercise, but a source privy to the exercise said 29 suppliers have been invited to supply bids.

Said Kawale: “Our plan is that we sign contracts by end of May so that delivery of fertiliser starts immediately. If all goes well, the plan is to start distribution of AIP products on September 1 and end by November 30 so that every farmer has fertiliser in their houses before rain starts.”

Section 37(3) of the PPDA Act states that a restricted tender may be used either when the goods, works or services are only available from a limited number of suppliers; all of whom are known to the procuring and disposing entity; and the time and cost of considering a large number of bids is disproportionate to the value of the procurement.

The law also provides in Section 37(10) that use of the method of procurement other than open tender is subject to approval by the Director General; and the procuring and disposing entity shall note in the record of the procurement proceedings the grounds for the choice of the procurement method.

Kawale said the ministry satisfied all the requirements, but did not give further details.

Public Procurement and Disposal of Assets Authority (PPDA) said the Ministry of Agriculture submitted a request for the use of restricted tendering in compliance with Section 37(3) (a) of the PPDA Act of 2017.

The organisation’s public relations and communications officer Kate Kujaliwa said PPDA reviewed the request in reference to Section 37(3)(a)and Section 37(10) of the PPDA Act of 2017.

“The Authority found the request to have satisfied the requirements provided under Section 37(3)(a). That is to say, the Ministry of Agriculture submitted a shortlist of bidders to participate in the restricted tendering.

“The authority granted the approval for the use of restricted tendering in exercise of its powers as provided in Section 37(10) upon being satisfied with the reasons the Ministry of Agriculture outlined, lessons learnt in the previous procurement of fertiliser, capacity and capability of the shortlisted bidders, among others,” she said.

Malawi Institute of Procurement and Supply chief executive officer Feston Kaupa said he had no problem with government’s move if the ministry had done a prequalification for fertiliser suppliers.

Said Kaupa: “It can be assumed that the invited suppliers are from that list of prequalified suppliers. If that is the case, then it should be in order.”

Last year, President Lazarus Chakwera announced government’s intention to overhaul the programme to make it more targeted and efficient.

In his State of the Nation Address on February 17 2023. Chakwera said it had become evident in the programme’s three years of implementation that it continues facing challenges, including ineffective targeting of beneficiaries, high cost of farm inputs and delayed procurement.

Kawale said some of the changes to the programme are that people with disabilities that do not allow them to be in the fields and the elderly have been removed from AIP and put on social cash transfer (SCT).

Another group that will be on the public works programme and will be paid cash, is that of those who do not have adequate land to cultivate.

“The third group consists of those with adequate land and are able to produce and they will be under AIP. The fourth group will be under Agriculture Commercialisation Programme. These are the most productive group.”

On the number of beneficiaries in the 2023/24 growing season, the minister explained that the cost of fertiliser will determine the number, adding that the public will be informed months in advance.

He added that the beneficiaries will come from farmer clubs that are already established and registered across the country.

In the 2023/24 National Budget, AIP has been allocated K117 billion. Last year’s number of beneficiaries was reduced to 2.5 million from 3.7 million the previous season.

Commenting on procurement of fertiliser for AIP in general, Fertiliser Association of Malawi (FAM) executive administrator Mbawaka Phiri said local suppliers are still struggling to pay suppliers abroad due to forex scarcity.

She indicated that according to a stock report compiled by the association on April 25, FAM members have just under 100 000 metric tonnes (MT) in the country.

She said this number may be slightly higher if the stock of non-FAM members is taken into consideration.

Said Phiri: “Assuming there is forex, the FAM members could mobilise an additional 400 000 MT for the 2023/24 farming season. However, if forex issues persist we may see a situation like that of last year where, overall, Malawi only imported 266 479MT, well below the country’s estimated requirement of 350 000-400 000 MT per year.”

Phiri earlier indicated that the current design of AIP is marred with inefficient targeting, mono-cropping and uncontrollable costs.

She said: “Due to the fact that Malawi imports all its fertiliser, up to 80 percent of retail cost of fertiliser in Malawi is largely determined by global market forces, therefore, Malawi is a price taker that cannot mitigate against the global price increases.”

Phiri also said there is need to redefine who qualifies as a beneficiary under the programme as well as consider offering subsidy on key legume crops that are exportable, assisting in the recent push to find cash crop substitute for tobacco farmers.