Malawi maize scam explodes

Sat, 31 Dec 2016 11:57:51 +0000


 MALAWIAN lawmakers have called for a full investigation into what they suspect to be a Zambia import maize scandal.

This is a matter in which the Zambia Cooperative Federation (ZCF) is alleged to have been overcharging that country’s state-owned grain marketer, Agricultural Development and Marketing Corporation (ADMARC) by pegging a tonne of maize at US$ 336 per tonne, in a murky contract that involves a Zambian company.

Malawi’s parliamentary committee on agriculture, irrigation and water development this week said the transaction of maize purchase from Zambia had characteristics of the ‘Cashgate’ corruption scandal and demanded a full investigation into the procurement process.

Chairman of the committee Joseph Chidanti –Malunga said the committee would institute an inquiry into the maize purchase transactions.

“The inquiry would establish what exactly went wrong. It will explain why there are delays in the purchases and why they (ADMAC) are saying they bought this much when they didn’t,” Malunga was quoted.

But ZCF executive director James Chirwa said the hullabaloo that has characterised the deal was a total misrepresentation of facts as Malawi was purchasing maize from Zambia at US$ 336 per tonne as agreed because Zambia was bearing all other costs associated with ferrying the commodity into that country.

Mr. Chirwa said he was appalled that there were reports suggesting that Malawi was paying more for the commodity and that a total of US$34.5 million had already been wired into the ZCF account when Zambia had not even received a single payment from Malawi over the contract.

He said the hullabaloo that has characterised the export of maize where the federation was accused of making a fortune for themselves was false as it was yet to receive some payment despite some of the maize having already been delivered to that country.

He described media reports in Malawi that ADMARC was paying about thrice the price of the commodity compared to the actual price in Zambia as false, fabricated and a misrepresentation of what was in the deal.

He clarified that a tonne of maize in Zambia was costing US$285 while ZCF was offering the maize to Malawi at US$ 336 per tonne bearing in mind that the Federation was bearing costs for transport, documentation and letter of credit.

“Let me clarify this issue because there has been a deliberate misrepresentation of facts. The government of Malawi ordered for 100,000 metric tonnes of maize from Zambia but our Government only allowed for the export of 50,000 tonnes. We have not delivered all this quantity and the process is still ongoing and so far we have only exported about 5,000 tonnes.

“A tonne of maize in Zambia is costing US$ 285 and other than that, transporting the maize to Malawi costs UD$38 per tonne. Documentation costs are pegged at US$ 5 while the letter of credit costs US$ 8. Considering all these costs that Zambia has to incur, a tonne of Maize in Malawi is fetching for US$ 336 per tonne and so, for 50,000 tonnes that we are exporting, we are only making US$450, 000,” Mr. Chirwa explained.

He maintained that reports that ZCF was already paid for the maize were false.

“The US$34.5 million purported to have been wired to ZCF is also false. In such transactions, the bank makes a commitment that the money would be paid and what is reported to be money paid to us is a letter of credit written by the bank to assure us that the monies will be paid.

“This is a commitment by the bank to pay for the transaction and so far, ZCF has not received any payment for the maize which has been exported and that which we are yet to export to Malawi. All these reports are not true,” Mr. Chirwa said.


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