Africa-Press – Malawi. The government has rescinded its earlier decision to stop Agricultural Development and Marketing Corporation (Admarc) from borrowing from foreign lending institutions to finance its turnaround strategy and agriculture commodity purchase activities.
This comes against the background that, in June this year, the government stopped Admarc from borrowing K403 billion externally to finance its resuscitation programme.
In September, chairperson of the parastatal Alexander Kusamba Dzonzi told The Daily Times that when they discussed with commercial banks, others expressed interesting in the issue and made offers.
In a fresh interview on Wednesday, Kusamba Dzonzi confirmed the development, saying the government, having noticed the problem, has cleared Admarc to look elsewhere for funds in preparation for the next season.
“The idea to borrow from outside last time was deliberately frustrated following botched due diligence that was carried out. Borrowing from outside follows different windows but all such windows must abide by [provisions of] the Public Finance Management Act. The problem we had last time was that the due diligence, or audit, was done on the financial arrangers and not necessarily on the actual financiers/banks themselves because those who conducted the audits refused to sign the Non-Disclosure Agreements with each bank, which was a condition given to us.
“So, the audit was done on wrong parties and, hopefully, your guess is as good as mine as to why the audits were done unprofessionally like that. However, we have received clear guidance from the President and Minister of Finance that we walk the officials at the Ministry of Finance, Reserve Bank of Malawi and Financial Intelligence Authority through all the processes of obtaining foreign funding from other windows other than those designed and enforced by the International Monetary Fund (IMF) or guided by the conditions of World Bank,” Kusamba Dzonzi said.
In a separate interview, Finance Minister Felix Mlusu said, initially, the decision was not necessarily frustrated but that the foreign financing institution needed to be properly vetted.
“[There was] nothing [like being] stopped from borrowing from foreign lenders. However, these foreign lenders needed to be vetted by relevant local authorities specialising in those matters by doing due diligence before giving any clearance where necessary. To my knowledge, local banks did not refuse to fund Admarc; they are funding them now,” Mlusu said.
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