Malawi losing out on South Sudan deal
Members of Parliament (MPs) yesterday took turns to condemn Malawi’s failure to benfit from the deal signed with South Sudan to export 180 000 metric tonnes (MT) of cereals annually, which would have earned the country about $300 million (over K300 billion) per year.
Presenting a report on the findings of their investigations in Parliament yesterday, Parliamentary Committee on Trade, Industry and Tourism chairperson Paul Nkhoma said the country has only made $1.4 million (about K1.4 billion) out of $900 million (K900 billion) that the deal offers.
The agreement to supply the cereals was signed in June 2021. It came at a time when Malawi produced 1.2 million MT of cereals as South Sudan faced a 465 000MT deficit.
However, by June 2022, Malawi had only exported 1 200MT out of the required 180 000MT, representing less than one percent from the agreement. Furthermore, the maize flour that was exported to South Sudan was certified as below human consumption standard as it was rotten.
Said Nkhoma: “The committee was disappointed. The Ministry of Agriculture did nothing, and continues to do nothing to organise farmers to produce and fulfil the export order, not only for South Sudan, but many other cases.
“The ministry left Ideal Group Limited to contract farmers to grow maize and other products for export. Ideal Company was too small a company to be entrusted with mobilising the growing of crops that can enable us to export 180 000MT of cereals per year to South Sudan.”
But while commending the mega farms approach in the deal, the committee’s chairperson also urged the ministry to aggressively find ways to use farmer cooperatives to produce for exports.
“The Ministry of Agriculture should realise that when we talk of agricultural exports, we are talking about our farmers being supported appropriately to produce the required crops,” he said.
On his part, the committee’s co-chairperson Thoko Tembo noted that the memorandum of understanding between the two countries emphasised the need to have a vibrant private sector, one which did not exist in Malawi.
He said the committee further observed that the private sector off-takers that added value were not enough and were only in their infancy.
“The Shire Valley Transformation Project was supposed to provide irrigation water to small-scale farmers by 2024, which would scale up the production capacity. But it was observed that there was a need to satisfy the local market before considering exports and this problem had been highlighted in the manner that the deal occurred.
“We observed that the MoU was a cry for the need of international markets and the forex that comes along with this. It was a pity that we underperformed within the first year of implementing the MoU,” said Tembo.
