Malawian taxpayers continue to pay $25 000 (about K43.3 million) monthly bill for an Israeli company managing a greenhouse agricultural project despite the company failing to start repaying a $5.6 million (about K10 billion) loan by last December.
The development has raised accountability concerns over the joint venture agreement known as GBI Greenhouse Limited (GGL), signed in January 2019 between the Malawi Government through the Greenbelt Initiative Holdings Limited (GBIHL) and Inosselia Agro Africa Limited for a high-value vegetable farm project in Lumbadzi, Dowa.
Speaking in an interview, outgoing Greenbelt Authority (GBA) board chairperson Wester Kosamu confirmed that the Israeli partner was yet to repay a single dollar of the $5.6 million government-guaranteed loan.
He said the failure has seen the Malawi Government continue to pay the company $25 000 every month for operational costs, a development he said is adding extra costs to the unrecovered initial investment.
“It is my hope that the new board will undertake reforms at this Greenhouse project, so that value for taxpayers’ money should be seen,” said Kosamu.
Insiders allege that the agreement has several grey areas, including lack of a specified repayment period for the loan and the basis for majority shareholding by the Israeli company.
GBA chief executive officer Eric Chidzungu said in an earlier interview that after breaking even in 2023, the firm was in the process of making profits and would start paying dividends to the government in 2025.
In a WhatsApp response yesterday, Minister of Agriculture Sam Kawale said: “GBA is in a good position to respond.”
New GBA board chairperson professor Muloza Banda in an interview said: “As a board, we will be interested to follow up on this issue… I need to understand where things are. Preliminary handovers have been done but we will need more substantive information.”
Efforts to get a comment from Inosselia’s project manager Eric Gorelik were unsuccessful.
Meanwhile, Centre for Social Accountability and Transparency executive director Willy Kambwandira said the revelations are troubling and must be investigated.
In an earlier interview, investment expert and former Public Private Partnership director general Jimmy Lipunga said the government can be involved in a project through a joint venture arrangement in which it assumes shareholding and, therefore, shares in the embedded inherent business risks.
In an earlier interview, Attorney General Thabo Chakaka-Nyirenda said his office was reviewing the arrangement.
The agreement, whose copy The Nation has seen, was signed on behalf of the government by former GBIHL chairperson Lloyd Muhara and former GBA chief executive officer Henri Njoloma while Inosselia Agro Africa Limited director Gil Rozen and lawyer Noava Cathene signed on behalf of the investor.
