The Tonse Alliance Government through the Ministry of Agriculture told Paramount Group to supply 10,000 tonnes of fertilizer for the Affordable Inputs Program (AIP) even though the company had no contract with Malawi Government for supply of the fertilizer.
The deal is in contravention of procurement laws which require government to seek approval from the Public Procurement and Disposal Authority (PPDA) for procurements above K40 million.
Under procurement law, every procurement deal above K400 million is required to be subject to open tender using the International Competitive Bidding framework and also subject to approval by PPDA.
In the case of the fertilizer deal, Principal Secretary for Agriculture Sandram Maweru told Paramount Holdings to release 10,000 tonnes of NPK fertilizer to Smallholder Farmers Fertilizer Revolving Fund of Malawi (SFFRM) for AIP.
Maweru claimed that the supply was an extension of a contract awarded to the company in 2021 but with the value increased by 15 percent.
“Government is in the process of establishing Letters of Credit to support the delivery of the fertilizer for the Affordable Inputs Programme (AIP). The Letters of Credit are expected to be finalized with an immediate concern.
“Whilst the process is continuing, we hereby present a request for you to release the above stated tonnage for immediate delivery to the beneficiaries,” said Maweru in the letter dated 8 February, 2022 and obtained by the Platform for Investigative Journalism (PIJ).
At the time, Government was also yet to table the 2022/23 national budget which included funds for the 2022 AIP.
The PPDA, which was bypassed in regards to the deal, told PIJ that the authority did not have information on the fertilizer procurement.
Maweru, SFFRM CEO Richard Chikunkhuzeni and Paramount Holdings Managing Director Prakesh Ghedia did not respond to PIJ enquiries over the procurement deal.
Meanwhile, Parliamentary Committee on Agriculture Chairperson Sameer Suleiman has told PIJ that the committee will demand an explanation from the Ministry on the procurement. He has also called on law enforcement to investigate the matter.
He said: “We are not surprised, this has been happening for a while. Last year too, they procured fertiliser even outside the budget, before the budget was passed. This is also contrary to what we were told that they will be procuring from manufacturers and cut out the use of middlemen. Is Prakesh a manufacturer.”
The revelations come amid fears government was duped out of K750 million in procurement of 25,000 tonnes of fertilizer worth K30 billion.
Government paid K750 million to London based meat company Barkaat Foods Limited for the supply of the fertilizer but the company cancelled the deal after receiving the money, saying it was just a middleman and had no capacity to deliver.
Last week, Maweru said the Ministry of Agriculture expects the company to pay back the money this month.