Constructive approach in five areas of concern on the fertilizer procurement deal with Romanian company

By Chifipa Mhango, Don Consultancy Group Chief Economist

JOHANNESBURG, 13th June, 2023–The Minister of Agriculture of Malawi, Hon. Sam Kawale’s explanation on the fertilizer procurement deal with a Romanian company has left us saddened, as it also reflects governance challenges on the part of Malawi Government.

 

I would like to remind my fellow countrymen the following: “The destiny of any country in a democratic depensation cannot be left in our man nor woman alone; nor a grouping of individuals; a political party and its supporters — not even Members of Parliament, the Executive nor Judiciary — but rather with its citizens having a strong voice on what is wrong and right.”

On the 14th of October 2022, I wrote an article in which I raised several concerns around the then alleged ‘Fertilizer Butchery Gate’ scandal but also offered tangible solutions on the best way forward for Malawi, through a process of an industrialisation programme that includes investment into a locally manufactured fertilizer in partnership with internationally reputable producers, with an established track record in manufacturing of fertilizer, and also recommended a shift towards direct importation of fertilizer products from manufacturers than the current “middlemen approach” as a short-term approach.

In the same article, I also raised the following key point: “No country can have political stability under an environment of food insecurity. The reliance on importation of fertilizer is no longer a conducive model, especially with the politicisation of its distribution and inefficiencies in procurement and the Governance model around identification of suppliers as the recent cases have exposed.”

In addition to the above high-level view, I also reiterated examples of an industrialisation approach adopted by countries such as South Africa, that also has Agriculture as a key sector, developing a chemical industry such as fertilizer manufacturing in Foskor fertilizer manufacturer (www.foskor.co.za), Omnia (www.omnia.co.za) as well as Sasol which also is into fertiliser manufacturing (www.sasol.com).

I then concluded with one of the key messages: “Malawi Government should consider a direct procurement approach through these South African based manufacturers of fertilizer as mentioned above, for a competitive pricing and delivery efficiency model approach, above all, these are SADC and African country-based manufactories — thus supporting the African Inter-country Trade Agenda.”

However, when I listened to the explanation and various reasons provided by the Hon. Minister of Agriculture, Sam Kawale, through the live media broadcast from one of the channels, it left one with more questions than answers.

While it is our responsibility as citizens to commend and applaud when the right is being done, where there is doubt and signs of wrongs, we also have a voice of concern to raise.

I would also like to advise the Minister of Finance Hon. Sosten Gwengwe that if indeed he responded through one of the media channels asking Malawians to give this Romanian company “a benefit of doubt” — that Government is not run on doubts but through constructive due-diligence process and following a structured Governance approach as guided by a procurement process.

I, therefore, draw observations that as a country and Malawi Government at large, learning is a skill that has not been acquired yet. We have not learned anything from the past mistakes. A mistake repeated several times becomes a norm or habit and challenging to even explain to the masses.

I, therefore, would like to engage the Hon. Minister of Agriculture, Sam Kawale with a constructive approach by observing five areas of concern:

* Firstly, there is a common trend emerging around Malawi Government deals being done in “veil of secrecy”, and with explanations coming in to kill fires. Surely this economically sensitive matter of fertilizer procurement should not have waited for media exposure first to be explained to the nation. The Fertilizer Butchery Gate scandal of 2022 remains fresh in the minds of Malawians and still an open case, as funds are yet to be recovered.

* Secondly, the Hon. Minister of Agriculture did not provide a clear reply on the procurement process that was followed to reflect adherence to Governance procedures. For instance, questions such as how the Romanian supplier was identified, what criteria was followed, who was the point of first contact into Government corridors, among others. Considering the norms in procurement process requires advertisement and a competitive bidding that takes consideration of pricing and delivery efficiency among others.

* Thirdly, the fertilizer deal seem to have been concluded without the involvement of any Parliament committee for, at-least, scrutiny before any agreement being reached, especially when the above explanation by the Hon. Minister shows diversion from the procurement process. If there was a “secret” reform to the fertilizer procurement process, then surely Parliament should have played an oversight role on the matter, considering the past mistakes.

* Fourthly, a deal based on “forward batter trade” involving Government presents several risks in a modern world, as Malawians have had similar explanations in the past around a Presidential jet.

It is such deals done outside Government procedure and governance modalities that have no one held accountable in the past when things go wrong.

The fact that this was a “forward batter trade” arrangement involving Government on to be produced agriculture products, as explained by the Hon. Minister, that alone was enough reason to inform Parliament through its relevant committees, as the risks are very high.

* Lastly, I hold the Hon. Minister of Agriculture, Sam Kawale in high esteem and believe that he is constructive in his approach for an engagement.

Although the intentions to involving the Romanian company in this fertilizer deal may have been guided with good intentions, the process and the “veil of secrecy” to the conclusion of the deal, as well as bearing in mind the historical mistakes is what is concerning.

Malawi cannot continue to be on a prolonged mistake path, especially on key issues regarding fertilizer procurement. I, therefore, would strongly recommend:

* An urgent reform to the fertilizer procurement model to which a strong committee involving key stakeholders, supervised by a Parliamentary process be constituted for the “short-term” solution of fertilizer procurement directly with suppliers, before we move permanently to own local production.

* A right to know of citizens through a Malawi Parliamentary process for a full disclosure of the details of the Romania fertilizer deal (contract); to interrogate various matters as part of a risk mitigating process; how the supplier was identified and through which process, and by whom; when was the deal signed, by whom and where, among others.

Our aim is not to be critical but assist Malawi Government to channel its efforts towards supporting the poor masses of Malawi and the economy at large, hence the recommendations above. It is high time that the citizens of Malawi are taken seriously, for the suffering has been enough on the ground.

Our country deserves a better approach on Governance issues.

The narrative has been copied to:

* Office of the President and Vice-President of Malawi

* Principal Secretary to the Office of the President & Cabinet

* Minister of Finance & Economic Development

* Minister of Trade and Industry

* Malawi media houses