Long wait for K563m AIP funds

Taxpayers will have to wait longer before the Malawi Government recovers $543 750 (about K563 million) paid to Barkaat Foods in a botched Affordable Inputs Programme (AIP) in June this year.

Correspondence The Nation has seen shows that the funds remain frozen at a bank in Germany as the court in Munich, where Attorney General Thabo Chakaka-Nyirenda filed a Confiscation Order of the funds, was yet to make a determination.

The delay, according to correspondence between Malawi Government through the Attorney General and Petra Wagner, senior public prosecutor general in Munich, is largely because Barkaat Foods, a United Kingdom (UK) slaughterhouse known for producing and processing meat, is yet to respond to the case.

In an interview yesterday, Chakaka-Nyirenda said the last time he received an update from Barkaat on the case was on December 5 this year.

He said: “I filed papers in Munich for a Confiscation Order, and Barkaat Foods were given an opportunity to present their case, but have not done so. The last time I was given a response was 5 December from the lawyers in Munich.

“On Tuesday afternoon, I followed up with them, they didn’t respond and I would be calling again today [yesterday] to follow up. They [Barkaat] are [the ones] delaying the court to pronounce itself on the matter.”

The correspondence from Wagner to Chakaka-Nyirenda also confirms that the matter could drag beyond this year.

Wagner wrote: “There is no news at the moment and this will unfortunately probably remain like this for a few weeks as there is a hearing [by the Munich court] which has to be completed.”

Chakaka-Nyirenda, who in November this year travelled to Munich for the exercise, said he had contacted his fellow attorneys in Germany on Tuesday this week if the court can consider the matter as soon as possible.

But while the Attorney General yesterday beamed with confidence that the money will be recovered, accountability and governance institutions feel it may take longer to recover the money. They have since called for the heads of all those involved in the malpractice.

Youth and Society executive director Charles Kajoloweka in an interview said it was obvious from the beginning that it would not be easy to recover money from people whose intention was to defraud the government.

He said: “These are individuals that already have questionable reputation on whether they exist or not. Already the company raised serious suspicions in terms of existence, so it was anticipated that we were going to face this challenge.

“It’s not easy to recover money from such deals. You should also appreciate the legal processes within European countries. You can’t just get back the money without following the laws of that country.”

For Kajoloweka, the process may take a little longer and will require cooperation from Germany, saying he was not amused that there was this prolonged recovery than anticipated.

He said: “We need to increase the cost of corruption and fraudulent activities in the public sector. Those implicated should face serious sanctions that they deserve.

“Unfortunately, we have not done enough to punish those culprits and that has created a further conducive environment for plunder and abuse of office. So it depends on what the current administration is going to do, to increase the cost of such criminal activities.”

Centre for Social Accountability and Transparency executive director Willy Kambwandira said the development was disturbing and does not give hope that the funds will be recovered.

He said: “Malawians should consider the money stolen through duty-bearers reckless and lack of transparency. It is very unfortunate that a lot of funds have been lost in the process of trying to recover the funds.”

Kambwandira said it was worrisome that some public servants would get away with such huge sums of money, and that perpetrators of this must accordingly be charged with mismanagement of public funds.

Human Rights Defenders Coalition chairperson Gift Trapence said Malawians are losing a lot of funds in trying to recover the money.

“The winding process means that when you are dealing with dubious organisations that tried to siphon money, you should not expect an easy process to recover the money. You may not even recover it,” he said.

As a way forward, Trapence has urged government to always follow due diligence in dealing with finances, as well as for the AG to tell Malawians what will happen to individuals that brought this mess.

On October 13 2022, former Ministry of Agriculture Principal Secretary Sandram Maweru said in a statement that the Smallholder Farmers Fertiliser Revolving Fund of Malawi had a contract with Barkaat Foods Limited to supply fertiliser for the 2022/23 AIP.

The company, according to the statement, had a deal with the actual supplier Yara Limited UK for an initial 25 000 metric tonnes of fertiliser and demanded a commitment fee of $727 000 (about K750 million) to lock the price. The money was remitted through Ecobank.

It reads: “Barkaat Foods Limited failed to supply and consequently terminated the contract citing loss of the production line at Yara UK and that they could no longer commit to supply the fertiliser and agreed to transfer the fee back to SFFRFM through the same Ecobank.

“This advance commitment fee payment of about K750 million is under recall by Ecobank and will be received by the end of this month of October 2022.”

The move irked President Lazarus Chakwera who on October 25 this year sacked minister of Agriculture Lobin Lowe and his deputy Madalitso Kambauwa Wirima for purportedly failing to provide leadership.