Taxpayers are set to foot a $33.3 million (about K58.3 billion) payout to a foreign fertiliser supplier after Attorney General (AG) Thabo Chakaka Nyirenda consented to pay Africa Investment Group (AIG), it has emerged.
The payout follows a High Court of Malawi Commercial Division judgement made in July 2024 in connection with the debt owed to AIG, a Mauritian firm, by Smallholder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) and ministries of Agriculture and Finance and Economic Affairs who are first and second defendants, respectively.
AIG is one of the private traders government metric tonnes (MT) of Affordable Inputs Programme (AIP) in the 2021/22 season, comprising 30 000MT NPK and 20 000MT Urea. contracted to supply 50 000.
The payout will bring to K72.8 billion the burden taxpayers will have to shoulder in two separate court agreements that the AG’s office entered into with claimants in July 2024 alone.
The other relates to Victoria Pharmaceuticals which was awarded K14.5 billion in a court case it pursued against Central Medical Stores Trust.
Reacting to the growing payouts in an interview yesterday, University of Cape Town professor of law Danwood Chirwa yesterday said the AG’s office should make public the legal opinion that led to the consent orders.
He said by making the legal opinion public, it would allow the public to appreciate the reasoning behind the decisions.
Chirwa said failure to do so would create a public perception of alleged corruption in the agreed judgements.
He said: “Otherwise, given the consistency with which public resources are looted using similar gimmicks, suspicion of corruption cannot be ruled out.”
In a separate written response, Malawi Law Society (MLS) president Patrick Mpaka said all legal and political authority derives from the people of Malawi to whom all holders of public authority are accountable.
He said: “Members of Parliament too can seek accountability on this under Part XVIII of the Constitution since no government funds can be withdrawn from the Consolidated Fund except in the manner prescribed by the National Assembly.”
Chakaka Nyirenda yesterday did not respond to The Nation questionnaire while Ministry of Justice spokesperson Frank Namangale said he would revert, but did not do so as we went to press by 8pm yesterday.
Court documents in the commercial cause number 51 of 2024 show that the payment to AIG was supposed to be made by October 20 2024.
But our sources have confided that government is yet to honour the payment despite the agreement signed by the AG and lawyers Arthur Alick Msowoya for SFFRFM and Wapona Kita representing AIG and Malawi Fertiliser Company, a third party to the case.
In the court documents, the Ministry of Finance and Economic Affairs and Ministry of Agriculture were mandated to ensure that SFFRFM is funded to settle the debt.
The documents further show that government defaulted , refused, neglected, ignored or otherwise failed to pay the price in terms of the contract; hence, together with other costs, the debt reached $33 340 588 (K58 379 369 588 at current exchange rate).
By breakdown, $28 990 537 (K50 762 430 287) was principal debt as of January 25 2024 while $2 174 335 (K3 807 260 585) was interest of the principal debt at an agreed rate of six percent per annum from May 1 2023 to July 5 2024.
Costs of the action, including statutor y collection charges to be paid to AIG lawyers are pegged at $2 175 716.18 (K3 809 679 031.81).
Under the agreement, Malawi Fertiliser Company is also expected to be refunded K17 124 643 196.06 which it received under a modified exchange contract facility with NBS Bank plc in respect of which there is a total failure of consideration.
Besides, the interest of this figure is pegged at K 1 138 123 709.09 at the rate of eight percent per annum accruing from November 15 up to July 2024 and K638 435 153.26 as statutory collection charges on the refund including value added tax payable to lawyers of SFFRFM.
Ironically, government allocated K142 billion for AIP in the 2021/22 National Budget to benefit at least 3.5 million farming families; hence, the non-payment is raising questions on what happened to the allocation. AIG is a Mauritius-based Meridian Group of Companies w h i c h s p e c i a l i s e s i n manufacturing and distribution of fertilisers and other agricultural commodities across Malawi, Mozambique, Zambia and Zimbabwe.
