Of corruption and fertilizer contracts cancellation in Malawi

News that government has cancelled the 2012/13 fertilizer procurement contracts for possible review is not unexpected. The review comes at a time when high level sources have revealed of serious anomalies and high level corruption in the way the contracts were awarded.

It has been alleged that Erica Maganga was removed as Secretary for Agriculture for “approving three suppliers and distributors on this year’s 2012/13 subsidy list from Southern Region.” It is alleged that President Joyce Banda “feared” these contractors “will use their profits to sponsor DPP” and she (President Banda) also felt that Maganga is DPP”.

The allegations to the effect that the Agriculture PS was transferred on the basis of her alleged affiliation to the DPP smacks of mediocre logic.

Masangwi: Fertiliser supplier by hook or crook

In the first place, it has been a tradition in Malawi and elsewhere that when administrations change, either heads roll or many top government officials are reshuffled to suit the newcomers’ objectives, policies and national agenda.

For all good or bad intentions, Erica Maganga could not have been an exception when many top government officials are being transferred or entirely removed since President Mrs. Joyce Banda was inaugurated on April 7, 2012. However, one does not rule out her ‘suspicious’ conduct in the selection of fertilizer suppliers could have prompted her transfer.

It is not a secret that senior officials from the Ministry of Agriculture have been awarding huge supply and distribution contracts of subsidy fertilizer to the same companies that have monopolized the same over the tenure of the FISP since it was launched in 2005/06 season.

Many of the companies that monopolized the contracts have capacity challenges and are not well established in the fertilizer supply and distribution industry. They were mainly awarded the contracts due to their close connection with the previous ruling DPP of former president, late Bingu wa Mutharika.

It is on record that these companies either supply late or do not supply at all, forcing the ministry to settle for ad-hoc contingencies. This scenario often throw the whole programme into logistical nightmares that result in some farmers receiving their inputs late when the rains have already started, or missing out on the programme completely.

Some companies that failed to supply fertilizer in the last season were also on the list of companies slated to supply subsidy fertilizer this season. More surprising was the fact that this season, they were awarded to supply even more tonnage of the fertilizer than the tonnage they failed to supply the previous season.

This scenario stinks even to a sucking toddler in diapers. The question is, what is special with these companies that they should be awarded contracts year-in-year-out despite their glaring capacity imperfections? What criterion is used in selecting suppliers and distributors that only gives the jobs to the usual suspects?

Indeed, the list of suppliers for the 2012/13 that were approved by Erica Maganga and her team included some that dismally performed in the past years and taking them on board once more defies logic. Erica Maganga should obviously bear the brunt for taking Malawians for granted, especially if it is true that she defended the ‘wrongful selection’.

The list of the 2012/13 Farm Input Subsidy Programme (FISP) suppliers included Elvis Suppliers and General Dealers who were awarded a contract to supply 4,415 tons of Urea and 1,500 of NPK at a cost of a whooping K1,195,331,888. Sealand Investments were awarded a contract worth K3,882,380,090; Simama General Dealers at K1,686,875,400; Mulli Brothers Limited at K2,734,942,163; Transglobe Produce Export at K1,241,851,863; Shire Limited at K1,220,781,889; and Optichem (2000) Limited atK2,925,534,834, among the 20 selected suppliers.

Elvis Suppliers and General Dealers, which is owned by the former governing DPP Southern Regional Governor, Noel Masangwi, was awarded a contract worth over a K100 million to supply 1,000 tons of fertilizer under the 2011/12 FISP. The company failed dismally and did not supply a single batch in the contract due to capacity challenges.

It defies basic reasoning, therefore, for the Ministry of Agriculture to award the same company a contract of even more tonnage (4,000), this season when it could not manage to perform in a contract involving a much lesser tonnage. This shows that someone at the ministry is not doing their job right, or is it a deliberate ploy by someone with vested interests to sabotage the subsidy process?

It is also alleged that Mulli Brothers Limited were offered multi-million kwacha contract to supply pesticides last year, which they never did despite pocketing the money. When authorities queried Erica Maganga why this was the case, she responded by giving Mulli Brothers yet another lucrative fertilizer contract for this season.

The new PP government must be commended for showing greater commitment to improve the food subsidy programme by, among other things, scaling-up the number of FISP beneficiaries from 1.4 million to 1.5 millions.

This is a powerful statement from government, and demonstrates that food security especially at household among the rural poor is on top of its agenda.

This commitment is, however in danger of being undermined if an important programme like the FISP is not cleaned and flushed of its undesired elements.

It is not a secret that the DPP administration turned FISP into a source of political patronage to reward its ‘friends’ and a small clique that was deemed to be politically correct. This was clearly wrong, unacceptable and a classic example of a practice that should not be allowed to see the light of day again.

Increasing the number of beneficiaries is a step in the right direction, but a lot still remains to be done in order to have in place a foolproof subsidy programme that truly serves the targeted beneficiaries and the government of Malawi.

Obviously, someone had to pay the price for the shoddy way the contracts were awarded. The way the process was handled smacks of suspicion and mediocrity of the highest order on the part of the controlling officers.

The clean-up process must start from tendering to awarding of contracts through to procurement and distribution. Let contracts be awarded on merit and not based on how close to the ruling elite someone is. Impunity should not be left to flourish within a pivotal programme like the FISP.

Because the sum- total of this is obviously a bad name to the FISP and government – not that the programme is bad – but an otherwise excellent initiative, designed to take millions of people out of the trap of hunger has been allowed to be tarnished by greed, corruption and maladministration.

There is an urgent need for a thorough cleaning of the whole FISP process to remove the enormous irregularities, which have greatly undermined its overall efficiency and effectiveness. The usual suspects must not be given further leeway to continue sabotaging the process.

Malawians need to see transparency and accountability in the way contracts are awarded in the FISP to reflect the new thinking on the political landscape; The Malawi Government and its cooperating partners need to see as many Malawians in the villages benefiting from the programme. A few greedy top government officers must not continue enriching themselves at the expense of poor ordinary subsistence farmers. God Forbid!

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