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Lowe justifies botched K750m fertiliser deal

Former minister of Agriculture Lobin Lowe has justified the botched K750 million fertiliser deal with Baarkat Foods Limited, stating it was ideal for the Affordable Inputs Programme (AIP).

Speaking in Lilongwe when he appeared before a joint parliamentary committee investigating the deal yesterday, he said Baarkat was offering prices that would have seen the Malawi Government procuring fertiliser for about two million beneficiaries.

Lowe: We ended up fighting with cartels

Lowe said the government’s directive for this year’s AIP was for the ministry to buy fertiliser directly from manufacturers.

He said: “However, when the Ministry of Agriculture moved to buy from manufacturers we ended up fighting with cartels.

“When ministry officials went to Egypt to check fertiliser, the companies in Egypt already had information about fertiliser prices in Malawi and they were offering at $1 150 to $1 300 per tonne. The cartels were influencing prices.”

Lowe, who told the committee that he provided policy direction on the matter as a minister, said the ministry then decided to settle for Baarkat Foods Limited as it was offering lower prices.

“Back home, we decided to take the Baarkat offer because it was the only company that could be cheap and cover a lot of beneficiaries,” he said, adding the prices for Baarkat would see a bag of fertiliser being redeemed at K25 000.

However, the former minister said it was only when the ministry decided to go to the UK to check the quality of fertiliser that it learnt Baarkat Foods Limited had lost the fertiliser production line. By this time, the K750 million had already been transferred, he said.

Lowe also said the development was a big blow to the country.

On Tuesday, Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) board chairperson Marjorie Maluwa Phiri told the joint committee that the SFFRFM board was not comfortable the moment the Baarkat deal was introduced.

She said the price of $290 per ton that was mentioned in the Baarkat deal was doubtful as were issues of quality and capacity.

Phiri said the quantity to be procured was 800 0000 metric tonnes with a trial run of 25 000 metric tonnes that saw government paying $725 000 (K750 million).

SFFRFM chief executive officer Richard Chikunkhuzeni also said he had doubts about the prices but the ministry was excited with the prices.

Secretary to the Treasury McDonald Mafuta Mwale yesterday told the joint committee that Treasury was not part of the procurement or payment.

He said: “The role of Treasury was only to provide funding to the ministry after it asked for money.”

He added that Treasury always advises and recommends that all procurement processes have to be met when using the funding.

However he conceded to have slept on the job as he was not part of the board meeting that discussed procurement of fertiliser.

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