Government ordered to institute disciplinary and criminal investigations in fertilizer deal with UK’s Barkaat Foods Limited

Interface meeting between the Ombudsman, Ministry of Agriculture and SFFRFM

* This is despite that the money that the government paid to Barkaat Foods Limited has since been reportedly recovered

* The order for the disciplinary and criminal investigation processes should commence immediately

By Duncan Mlanjira

The Ombudsman has directs the Ministry of Agriculture, in conjunction with the Office of the Director of Public Prosecutions DPP and the Attorney General, to institute disciplinary and criminal investigations in fertilizer deal that involved UK-based Barkaat Foods Limited.

This is contained in her Systemic Investigations Affordable Input Programme (AIP) that was carried for the 2022/2023 and 2023/2024 growing seasons, in which she has exposed the AIP’s serious deficiencies in its management and execution.

Thus on the Barkaat Foods Limited, the Ombudsman directs for “follow through with disciplinary and criminal investigations, as appropriate, and ensure that attendant disciplinary sanctions as well as criminal prosecution, as the case may be, ensue in respect of all the public officials or persons involved in relation to the transaction with the company”.

And this is despite that the money that the government paid to Barkaat Foods Limited has since been reportedly recovered and the order for the disciplinary and criminal investigation processes should commence immediately.

In her analysis of her findings, in which she had interface with various AIP stakeholders including meeting Minister of Agriculture, Sam Kawale, the Ombudsman indicated that “one notable case of a lack of due diligence, mismanagement and misappropriation of public funds in the implementation of the 2022/2023 AIP, was the reported payment of MK750 million to Barkaat Foods Limited, a firm which was a purported supplier of fertilizer”.

“It was however established that the firm was a butchery and did not supply the fertilizer to the Government of Malawi. The money that was paid by the Malawi Government for the said transaction was reported to have been recovered with the intervention of the Attorney General Thabo Chakaka Nyirenda, when the issue was brought to light by the Agriculture Committee of Parliament Chimjeka.

She observed that Chimjeka quoted Smallhorder Farmers Fertiliser Revolving Fund of Malawi (SFFRFM) chief accountant, Watison Chirambo, as saying the money had finally reflected in the company’s official account, but could not give evidence from the bank about the transfer.

“Chimjeka further reported that Chirambo said SFFRFM had sent all the documentation to the office of the Attorney General, who confirmed to have received the documentation and said he wanted to seek approval from the bank before showing the documentation to the public.”

The report also highlights other fraudulent activities, that include reports of over 700 bags of stolen Urea fertilizer belonging to the SFFRFM meant for the AIP were intercepted in Tete, Mozambique. “Commenting on the development, SFFRFM Chief Executive Officer, Richard Chikunkhuzeni said his major concern was that the theft delayed distribution of the fertilizer (Chinoko, 2023)2811.

“In February 2023, a 45-year-old man Geva Chikola was arrested in Phalombe after being caught offloading ‘undocumented’ 600 bags of fertilizer at his warehouse,” the report further says. “South Eastern Region Police publicist, Edward Kabango said Chikola was arrested at Chiringa Trading Center adding that investigations were still underway (Malawi-Voice, 2023)29.

“In January 2024, Police arrested a 27-year old Group Village headman Thunga in Ntcheu for allegedly conniving with some dealer to steal fertilizer of his subjects under the programme.

“Ntcheu Police spokesperson Jacob Khembo said the dealer allegedly collected K660,000 and National IDs from 44 beneficiaries promising that he would help them to buy NPK fertilizer.

“The Police spokesperson pointed out that on 4th January 2024, the Group Village headman Thunga returned the money and identity cards to the owners telling them that they had failed to redeem the inputs, but when some of the beneficiaries took their cards to Sharpvalle AIP selling points to buy the fertilizer, they were told that they had already bought the inputs (Kang’ombe, 2024)30.”

The Ombudsman added that in the face of all this, President Lazarus Chakwera is on record to have said his Government would not abandon the AIP — “arguing that starvation would be even more expensive than importing fertilizers for the programme”.

“The President made these remarks when he launched the 2023 AIP in Kasungu. He claimed that those calling for abandonment of AIP have steady sources of income and therefore can afford to buy food (Maulidi, 2023)31.”

The Ombudsman takes note that Agriculture Minister Kawale is on record to have stated that the Government plans to use the successes drawn from implementation of the National Economic Empowerment Fund (NEEF) loans to farmers as an exit strategy for AIP.

“Kawale further stated that the beneficiaries of AIP would be transitioned to access NEEF loans so as to start reducing the numbers for the AIP. He stated that most farmers who accessed NEEF loans for farming were expected to get bumper yields (Meki, 2024).”

The report further takes note that in 2023, Malawi Human Rights Commission (MHRC) recommended to the United Nations (UN) Committee on Economic, Social & Cultural Rights “to end the AIP on grounds of politicization and sidelining of people with disabilities”.

“Livingstonia Synod’s Church & Society Programme has previously called on government to abandon the AIP, with its Executive Director, Rev. Mcbowman Mulagha pointing out that it is highly politicized and a breeding ground for corruption.

“Speaking during the 2024/2025 pre-budget consultations in Mzuzu, Reverend Mulagha suggested that the resources that are channeled to AIP be redirected to agriculture extension or mega farms to improve production.

“Malawi’s development partners have also variously pointed out that the AIP was choking other viable investments within the agriculture sector (Phiri, 2023).

“Phiri quoted a joint statement by the European Union (EU), and Government of Malawi following the Annual Agriculture Joint Sector Review, saying it is not a secret that, with over half of the public spending in the sector devoted to the input subsidy programme, there is not much left to invest in drivers of growth, such as irrigation, rural infrastructure, research and agricultural services, for which there is a need to rethink the allocations in the agricultural budget.

“Delays in the distribution of inputs under the AIP over the years are well documented. For example, in February, 2023, residents of Samson Village in the area of Traditional Authority (T/A) Thomas in Thyolo, marched to the office of Thyolo District Commissioner to demand money they had paid for the purchase of fertilizer under the AIP saying government had failed to supply them with the inputs (Sapuli, 2023)3612.

“Sapuli reported that the residents, whose village borders Chikwawa and Nsanje, had left their homes the previous day and walked to Thyolo District Council offices saying government had failed them.”

She observed that in Malawi subsidies are implemented “to assist farmers in shouldering the cost of production, and ultimately increase food security and sustainability. These subsidies have proved to assist the worse off people in the social strata to attain food security, at household and national level.

“However, the literature also presents undeniable evidence that these subsidies have eroded the countries’ economies to a point where other sectors of development have been severely affected or chocked.

“For the case of Malawi, largely, although the AIP assisted subsistence farmers to meet the cost of production, more and more people face hunger and need further government assistance.

“Smart subsidies are nevertheless still subject to major political economy and implementation challenges and need further new thinking and theory, with ongoing action research seeking to constantly improve effectiveness and efficiency and to keep ahead of fraud and rent seeking.

“However the risks of their diversion, capture and inefficiency also grow over time, and this poses major political and technical challenges.”

In February, when she presented the final report on systemic investigations on AIP implementation in Dowa, the Ombudsman asked the government to consider reprogramming the AIP facility, saying it has for years failed to make the country food secure.

Malera acknowledged that there has been some improvements in AIP implementation, among them good political will and programming at the technical level, which, she said, has increased yields at the household level.

“Although there have been some improvements, there are still some maladministrations that weaken the overall efficiency and effectiveness of the programme,” she was quoted as saying by Malawi News Agency (MANA).

She emphasised that corruption and unethical conduct by stakeholders involved in the programme derailed its success and that the AIP comes at a huge cost, and the cost-benefit analysis does not reflect the billions spent in the implementation of the programme — hence the call for the government to reprogram the facility.

“In the short term, there should be fundamental remodelling of the subsidy programs, to optimise efficiencies, effectiveness and responsiveness to fit into the MW2063 goals,” she said.

On his part national AIP coordinator in the Ministry of Agriculture, Justin Kagona told MANA that the government had already started reprogramming and improving the programme to ensure that beneficiaries are assisted.

“We have been reducing the number of beneficiaries from 3.8 million in 2020–2021 to 1.5 million in 2022–2023. This shows that the government is modifying and improving AIP.

“While we are reducing the number of AIP beneficiaries, we are increasing commercial production like mega farms, agriculture commercialisation, and the provision of loans to commercial farmers under the NEEF to achieve food security.”

In his SONA during the opening of the 2024/2025 National Budget session, President Chakwera said his administration is committed to redesign AIP to make it more targeted on those who are able to achieve food security with it.

The programme targeted 1.5 million farmers, with land holding sizes of 0.25 hectares to two hectares, to benefit in the 2023/2024 growing season and are expected to produce 1,125,000 metric tonnes, contributing to over 32% of the national grain requirement.