Maravi

Daka explains $140 million ADB loan to pay farmers

COMMENT - This is OUTRAGEOUS!!! They receive $100 million in taxes from the mines, and they borrow $140 million from the ADB??? I guess they put it on the public tab than no one will notice? Just let the people pay through a devalued Kwacha. No government that does not tax the mines to the fullest extent must resign in shame.

Daka explains $140 million ADB loan to pay farmers
By Kombe Chimpinde
Thu 16 Sep. 2010, 14:30 CAT

GOVERNMENT has said it was forced to borrow US $140 million from African Development Bank (ADB) towards payment for maize bought from farmers because local commercial banks could not immediately mobilize the funds.

Agriculture minister Peter Daka told Post Online in an interview following President Rupiah Banda’s revelation that government had borrowed to finance payment to farmers that farmers needed to be paid while commercial banks did not have sufficient funds to meet the payments.

“We are talking about a bumper harvest of 1.7 metric tonnes so I mean it’s only logical that we borrowed this money because it is not there in government coffers, it’s not budgeted for. You know K100 billion can only procure 40,000 metric tonnes. So really this bumper harvest is unprecedented,” Daka said.

But former finance Minister Ng'andu Magande has described the move by government as absurd and blamed the chaos in the maize marketing sector on lack of planning.

Magande, who is also an economist, told the Post Online that government has failed to properly handle the marketing of maize due to poor planning.

“Here is a bumper crop, what have you written today in The Post? Mazabuka, storage problems, Chipata, payment problems, Chief Chitimukulu, the whole market in problem. But for how long did we know that we were going to have a bumper harvest?” Magande asked.

“When I was an economist in agriculture, we used to do crop forecasts. By 30th of March, we knew what crop was on the market, and then we went to Kabwe Industrial Fabric (Kifco) to order empty grain bags. This is now the time, and people are still crying that they don’t have empty grain bags,” he said.

He said had there been adequate planning put in place by those in government, they would have simply walked into Barclays Bank branches in Kasama and borrowed money to pay farmers in Chitimukulu’s village.

“But instead, somebody has gone overseas to go and borrow foreign currency to come and pay the people in Chitimukulu’s village, how will you pay back that money. So it’s a big problem.”

Magande said it was shocking that government was going to borrow money from an external source instead of utilizing the commercial banks and the central bank.

“I am shocked! Government is now going to borrow almost K1trillion to go and buy maize in mukulaika to go and get maize from villagers. Where are the banks in Zambia ?” Why can’t they ask Bank of Zambia to let them use part of the reserves which they are saying have reached US $2 billion dollars,” he wondered.

“... part of that money came from International Monetary Fund IMF but someone is holding the money on Cairo road at Bank of Zambia saying our reserves are the highest and yet(president Banda) he is forced to borrow US $200 million dollars and I would like to know where they are borrowing this money.”

He observed that it was retrogressive for the country to say that the harvest was unprecedented when the government had a crop forecast survey department under Central Statistical Office.

But agriculture minister Peter Daka said that as far as he was concerned government needed to borrow money from outside the country for them to clear the unprecedented harvest of the country’s staple grain.

“You don't bake your own cake and eat it yourself. There are other people that should participate in the cycle so. There are so many Zambians that can export this maize to areas like Congo DR. Government has given a free will to everybody to get a an export license to export the produce. So the challenge is for everybody,” Daka said.

He said planning was not only on the part of government but also needed the participation of the private sector.

“Government works with the private sector, there are millers, there are traders associations, Zambia National Farmers Union. So really it’s not government to give the impetus, government has given a production formula which is the FISP(Farmer Input Support Programme) but you can’t ask government alone to buy all the maize that has been produced. The private sector must participate but not as low as K25,000 per 50 kg bag when the floor price is K65,000,” Daka said.

“We have borrowed 140 million dollars do you think our banks can give us that money. What government planned was K100 billion which could have procured 40,000 metric tonnes. But this production is unprecedented it has never happened before. You know its governments effort that is making sure that the production is increased from the levels that it has been by increasing number of people accessing fertilizer. If you look at the number of people that have accessed fertilizer from 250 to 550 to almost a million now.”

Last this weekend President Banda announced that government had borrowed US $140 million from abroad to enable government pay off the farmers who had supplied maize to FRA.

He made the announcement when he graced the Ukusefya pang'wena ceremony where the Bemba chief, Chitimukulu expressed concerns on the maize marketing problems affecting his subjects in Northern Province.

Labels: CORRUPTION, DOMESTIC DEBT, PETER DAKA

posted by MrK @ 6:26 PM