Economic expert, Ben Kalua, has advised government to seriously consider nullifying a loan from PTA Bank worth $34.5 million (K24 billion) that is meant to be used to procure 100,000 tonnes of maize from Zambia saying the country stands to lose a lot if it proceeds with the deal.
Kalua who is an economics lecturer at the University of Malawi, Chancellor College, is of the view that with maize crop looking promising in the fields, the country may be faced with serious storage challenges if it procures additional tonnes from the copper rich nation.
Par l iament las t year borrowed the money in the wake of looming hunger which threatened lives of at least 6.5 million people across the country, but the funds are now in possession of Zambia Cooperative Federation’s (ZFC) bank where some unscrupulous officials from Malawi and Zambia cut corners in a scandal that has seen George Chaponda being fired as minister of Agriculture.
“There is overproduction of maize in Zambia this time around and even here we may have a surplus and be able to fill up our empty silos but we don’t need too much of it. If there is need to supplement in just a few districts where people will not harvest enough, then government can purchase locally but we don’t need the remaining tonnes from Zambia.
“Government should just revoke the loan. It should be easy to do it because I don’t think we can be charged for what we haven’t used. We
haven’t drawn down much and we should avoid a situation whereby the country has too much maize and there are no enough grain reserves,” Kalua observed.
He added that there is a big problem of overproduction of maize for human consumption in the country, leading to collapsing of prices and therefore urged line ministries to explore commercial routes such as production for animal feeds.
When contacted for his comment Minister of Finance Goodall Gondwe said: “I cannot comment anything on that because I was not involved in the procurement of the maize and I don’t want to be involved now.”
Secretary to the Treasury Ben Botolo also refused to be drawn to comment on what options government has on the table as regards the loan saying he is new in the office.
Chairperson of joint committee of Parliament that probed the maize deal, Joseph Chidanti-Malunga, said the committee regrets the loan adding that now the issue of getting back the funds is critical.
“The letter of credit is irrevocable which means as a country, we are in for it. But we can still go ahead and cancel at a huge cost of K550 million in fees and penalties according to the calculations the committee has done,” Chidati Malunga said.
Commenting on the issue, Malawi Congress Party (MCP) Deputy Secretary General, Eisenhower Mkaka, also said that it is better for government to renegotiate with PTA Bank and cancel the loan, than losing millions of dollars to callous leaders.
“The DPP government ostensibly created so many layers in the alleged transaction in order to create loopholes that could be used for fraud and corruption. As is apparent, the maize that was to be procured will now not serve its intended purpose. The vendors have enough to cushion against the mishap. Thus we are much better cancelling the facility,” Mkaka said.
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