Malawi’s Presidential Initiative, EDF clash
A K300 million trade finance partnership between the Presidential Initiative on Poverty and Hunger Reduction (PIPaHR) and the Export Development Fund (EDF) has gone sour.
PIPaHR now wants back a K3m deposit and the withdrawal of about 1,000 tones soya beans. PIPaHR is now hunting for new possible financiers and currently encouraging and directing people who are bringing soya beans for sale to a newly established edible oil manufacturing company.
Presidential Initiative on Poverty and Hunger Reduction (PIPaHR) National Coordinator Flora Kaluwile confirmed this in a recent interview saying OPC had to pay EDF K3 million as a one percent deposit to access K300m trade financing for purchase of crop produce which is earmarked for the export market.
She disclosed that because of this, PIPaHR has had to suspend buying of soya beans from farmers. PIPaHR was supposed to identify about K12 billion to buy and secured legumes in Auction Holdings Agricultural Commodity Exchange (AHACX) managed warehouses before EDF kicked off trade financing.
“The legumes require pre-export financing of at least K6 billion. But the initial funding (of K298m) to purchase the legumes was provided by the government. Additional funding of K300m was supposed to be arranged through EDF,” Kaluwile acknowledged.
The PIPaHR distributed seed to groups of smallholder farmers in selected areas in the country with the arrangement to buy the pulses estimated in the region of 42, 723 m/t at the time of harvesting.
The PIPaHR had identified a group of aggregators who bought the soybean, graded and packeted it before handing it over to AHACX in a number of districts.
“Even where we have paid EDF the one per cent payment, we still cannot get the trade financing. We have written them demanding back the funds which are about K3 million. Meanwhile, we are directing people bringing soya beans to sell at Sunseed Oil Limited who are buying too,” she disclosed.
Sunseed Oil Limited has commissioned a vegetable edible oil factory with a capacity to process 180,000 metric tonnes to produce edible oil. Production of soybean in Malawi has been growing from an estimated 30-40,000 metric tonnes in 2012 to 75-90,000 metric tonnes this year of which Sunseed Oil Limited has already bought 15,000 metric tonnes.
“Even if Sunseed buys all the soya produced in Malawi, it will still be operating at 50 per cent capacity. For this reason, Sunseed would like to see production in Malawi increased,” Kaluwile told The Daily Times.
The aggregators used in the exercise have been using funds “donated to government aimed to empower the farmer by ensuring they access the market” which in documentation elsewhere have been said to be taxpayers’ money.
In an earlier interview spokesperson for the Ministry of Finance Nations Msowoya told The Daily Times that PIPaHR was using funds from commercial banks based on a deal with EDF.
PIPaHR bought soybeans in Mzimba, Karonga, Chitipa, Rumphi, Kasungu, Nkhotakota, Lilongwe, Dedza, Dowa, Zomba, Balaka, Blantyre, Thyolo, Mulanje, Nsanje, Mangochi, Machinga and Ntcheu districts.