CAMA says Chaponda implicated in Malawi maize purchase, demands explanation: Kapito tenders ‘objective evidence’

Embattlked Minister of Agriculture, Irrigation and Water Development George Chaponda interfered with procurement of maize currently Agricultural Development and Marketing Corporation (Admarc) is selling at K12, 500 per 50 kilogram bag in its depots across the country despite his insistence of not being involved, Consumers Association of Malawi (CAMA) investigation has revealed.

CAMA carried out its investigation study in relation to the purchases of maize both local and international by Admarc following reports of corruption element by those that were involved in the purchase of the maize.

And through its final findings presented to the public on Tuesday, CAMA faulted Chaponda of lying to the nation of his minimal involvement in maize purchase as a minister, revealing that he abused his powers and interfered with maize procurement process at Admarc.

The consumer body has, however, defended Chaponda in the procurement of the controversial 100,000 metric tons maize from Zambia, which according to the study, only less than 5,000 metric tons was delivered in Malawi and that no payment has been made yet.

Speaking to journalists on Tuesday in Blantyre, CAMA Executive Director, John Kapito demanded explanation from Chaponda on his involvement in the procurement of maize locally by Admarc.

“Admarc and Ministry of Agriculture continue to provide the public misleading and contradicting information as regards to the procurement of the Zambian maize. There is a need to investigate why the Minister George Chaponda and the Chairperson of Admarc Board informed the nation that they were not involved in the local and international procurement processes of maize,” demanded Kapito.

Local Maize Purchase

The investigation study revealed that Chaponda lied to the nation that his ministry and him as a minister did not interfere or got involved in any procurement arrangements of maize in the country and yet the ministry was able to obtain a letter of no-objection from the Office of the Director of Public Procurement (ODPP) when it is not a procuring entity of maize for Admarc.

The investigation further revealed that ministry of agriculture, with Chaponda’s blessings, tried to influence Admarc to purchase maize from local suppliers at exorbitant prices without consideration of its impact on the consumers’ affordability to buy such maize.

According to documents which Nyasa Times has sourced, Chaponda and a team in his ministry obtained no-objection from ODPP and compiled a list of local maize suppliers whose quoted prices were exorbitantly high as compared to the current Admarc’s market selling price per kilogram.

It has been revealed that On October 22nd, 2016 the ministry of agriculture through Bright Kumwembe wrote Admarc to adopt the no-objection letter which actually was meant for Strategic Grain Reserve (SGR).

The letter had a long list of Malawian traders who had not gone through Admarc’s procurement process, and had different quantities and prices of maize that were generally above the K250 cap per kilogram authorized by Treasury.

Despite Chaponda’s influence on Admarc to adopt the list of the suppliers and the no-objection letter, the grain marketer rejected to be smeared in the mud of potential fraud and corruption.

And on October 28th, 2016 now suspended Admarc Chief Executive Officer, Foster Mulumbe wrote the ministry refusing to adopt the imposed letter of no-objection arguing it would be irregular to adopt such letter meant for SGR.

“It will, therefore, be irregular for Admarc to award contracts instead of the ministry. It will also be irregular for Admarc to turn maize meant for SGR into commercial. The entire procurement process was handled outside Admarc Internal Procurement Committee and therefore it would be difficult for Admarc to award contracts without going through the due procurement process,” wrote Mulumbe.

Chaponda, meanwhile suspended as minister of agriculture by the High Court in Mzuzu, has been claiming his involvement was minimal as the main buyer of the maize was Admarc and not his ministry.

Kapito added: “It is common knowledge that most of the maize that is selling on the market is very same maize that was imported by various traders from Zambia and sold to Admarc with the influence of the Ministry of Agriculture.”

International Maize Purchase

According to CAMA’s investigation study, two Zambian suppliers namely Kaloswe Commuter and Courier Limited and Zambia Cooperative Federation Limited (ZCF) failed to supply Malawi with maize as stipulated in their contracts. ZCF only managed to supply less than 5,000 metric tons.

CAMA noted that Kaloswe Commuter and Courier Limited contract with Admarc was terminated and that there was no activity from both sides.

“Our investigation study revealed that no funds have been remitted so far to any of the two suppliers and that the ZCF request for payment has not been effected.  It has been observed that both ZCF and Kaloswe contracts need to be terminated as they both failed to meet the requirements of their contractual obligations.”

Meanwhile, the consumer body has recommended that the credit line agreement between Malawi and PTA Bank which provided funds for procurement of maize should be terminated and the loan should be cancelled, and that such funds should not be diverted to any other activity without approval of Parliament.

Payment mist

The investigation study and letters which Nyasa Times has sourced from Reserve Bank, ZCF and Admarc, confirm that no money out of the US$34.5 million which the grain marketer was expected to pay for 100,000 metric ton of maize ZCF was expected to supply to Malawi has not been paid.

According to contractual agreement between Admarc and ZCF, payment was to be made for tranches of 10,000 metric tons upon presentation of Loading Order, Commercial Invoice and Goods Received Note. However ZCF has only managed to supply 1,530.508 metric ton of maize below the requirement.

The company is currently seeking payment of the supplied maize amounting to US$528,025.26 which the Reserve Bank of Malawi has refused to authorize considering that the supplied maize did not meet the required amount to trigger payment as stipulated in the contract.

Kaloswe role

Based on the investigation study and contract agreement between Admarc and Kaloswe Commuter and Courier Limited, the company was not engaged as a middleman to supply maize to Malawi; it was, infact, quoted as one of Zambian maize traders who expressed interest to supply maize to Admarc.

However, their contract was terminated on October 11th, 2016 after Admarc noted that had entered into a contract with a potential conman. Admarc terminated the contract on grounds that the company failed to commence deliveries of the maize within 14 days as stipulated under clauses 5 (a) and 15 (a) of their contract, it failed to deliver the maize within the agreed 120 days or any mutually agreed and extended period as stipulated under clause 5 (c) of the contract.

Admarc accused Kaloswe of concealing material information about its source of maize who happened to be ZCF which Admarc had also signed a contract with, that it did not have maize at the time of concluding the contract and that it failed to open a Letter of Credit (LC) since it did not have an Export Licence despite claims that it was the only one allowed to export maize from Zambia.

The documents in our possession indicate that Admarc between May and June, 2016 quoted and entered into contract agreement with several maize suppliers from Zambia including Kaloswe Commuter and Courier Ltd and Zambia Corporative Federation (ZCF) who agreed to respectively supply 100,000 metric tons of white maize for commercial purposes at a cost of US$345 per metric ton.

Meanwhile, both commission of inquiry set by President Peter Mutharika and the Anti-Corruption Bureau (ACB) have started investigating the saga amid confirmed reports that Admarc’s Chief Executive Officer, Foster Mulumbe has been sent on forced leave until the matter is concluded.

Mulumbe and other government officials including Minister George Chaponda are accused of pocketing about K9 billion out of the deal.

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