Ministry of Finance and Economic Affairs has disbursed K52 billion out of the K161 billion budget for the implementation of this year’s Affordable Inputs Programme (AIP), a development that will negatively affect the programme, it has emerged.
Briefing the Parliamentary Committee on Agriculture on delays in the distribution of AIP fertiliser, Ministry of Agriculture Principal Secretary (PS) responsible for technical services Medrina Mloza Banda said while there are capacity challenges with some suppliers, Treasury has also not provided sufficient funds for AIP, with only about K52 billion released so far.
She called on the committee to help in asking Treasury to provide more resources.
Said Mloza Banda: “We have been pushing for the funds but there are still delays. We need the help of the committee to engage Treasury so that they release the finances.”
Earlier on Wednesday, the Smallholder Farmers Fertiliser Revolving Fund of Malawi told the same committee that there is 36 671.50 metric tonnes (MT) of fertiliser under collateral awaiting government payment to release it for distribution.
Committee chairperson Sameer Suleman has since said it is important that Treasury prioritises the AIP, especially considering that the rains have started and some farmers in the Southern Region have started planting.
He said the committee will engage Treasury to provide resources for the AIP, pointing out that there are arrears for past programmes that also need to be settled as they are posing a threat to the current programme.
Said Suleman: “With the hunger affecting the country, government should move with speed on the AIP. Farmers need the inputs in good time. If Authority (Mera) and National Oil Company of Malawi (Nocma) for a special consideration of fuel supply to avert a possible shutdown of the company’s diesel power plants. Malawi Energy Regulatory
Egenco public relations officer Mervin Mchenga expressed optimism in a written response that the generation company will be considered, failing which, operations of their diesel power plants “will be greatly affected”.
Overall, the company’s generation capacity from diesel generators installed in Blantyre, Lilongwe, Mzuzu and Likoma and Chizumulu islands is 53.2 megawatts (MW).
Egenco said in a statement that it requires a minimum of 10 000 litres of diesel every two weeks for normal operations at both Islands but indicated that due to fuel shortages,
the required quantities of fertiliser would have been bought. Let them provide money, the K50 billion they have provided is just little.” all the money was provided,
However, he said if Treasury does not have readily available resources, the ministry should engage suppliers that already have fertiliser to supply without upfront payment.
Suleman said Eastbridge indicated that was ready to supply fertiliser on credit and at a lower rate of $755 per tonne than the $1200 that other suppliers are charging.
However, he said the committee will have to conduct due diligence for Eastbridge to establish if it indeed has the capacity to supply the AIP fertiliser and at a cheaper cost.
Suleman said the committee wants to check the 28 000MT fertilizer that East Bridge has indicated is already in Malawi and 60 000MT that is in Zambia.
In an interview yesterday, Treasury spokesperson Williams Banda said the Ministry of Finance and Economic Affairs provides funding in line with cash flow plan provided.
He wondered if all the fertiliser has been delivered for the Treasury to release all the money.
As of Wednesday last week, government had sourced 16 261MT of fertiliser out of the required 104 000MT. It was banking on 36 671.5MT under collateral to increase stocks for immediate distribution.
This year AIP is targeting 1 054 945 beneficiaries.
