Thursday, March 12, 2015

How Malawi Benefited From 2007 Maize Exports' Deal to Zimbabwe: What Happened Behind The Scenes

A lot has been said about the export of Malawi maize to Zimbabwe between March 2007 and April 2008, and how delays by the Zimbabwean government to pay Malawi the last chunk of US$20 million created the impression that the deal was a flop. RICHARD CHIROMBO caught up with the man who managed the process of locally sourcing the maize and it to Zimbabwe, National Food Reserve Agency (NFRA) Chief Executive Officer, Nasinuku Saukila. Excerpts: 

You must have been a very busy man between 2007 and 2008. Some records indicate that Malawi exported 200, 000 metric while others indicate otherwise: What quantity did Malawi export to Zimbabwe?
It is true that NFRA managed the export of maize to Zimbabwe between March 2007 and April 2008. As head of NFRA, I managed the process. In total, Malawi exported 306, 000 metric tonnes to Zimbabwe. 

With the controversy that later shrouded the deal, especially after the Government of Zimbabwe delayed in paying the last chunk of US$20 million, are you proud that you are associated with the deal?
Yes, I am proud of that deal. For your information, the deal created a value-chain in Malawi. The export of the 306, 000 metric tonnes created a horde of activity. The maize came from individuals like you and companies, and the activities happened over a period of 10 months. Imagine the amount of activity taking place! So, if I have to do it again, I would do it again because so many people and sectors benefitted from that deal. The problem is that people were concentrating on a small thing. There was only US$20 million that was not paid, at government-to-government level, at the end of it all. In the end, the issue was settled. But a lot happened at local level, and the benefits applied to a lot of Malawians. We have to appreciate the way individuals like you and companies generated income out of that deal, and the value chain that was created for the ordinary Malawian. 

How did the ordinary Malawian and local companies benefit from the deal?
There was a lot of activity that took place. To begin with, 306, 000 metric tonnes were transported by the Road Transport Operators Association (RTOA) 28 metric-tonne carrying capacity trucks, translating into about 11, 000 truck-loads of maize and 6.1 million 50 kilogramme bags of maize. In short, here is the value-chain the deal created. In the first place, we look at the maize grain. We bought it locally, creating worth for producers in the process. The grain also had to be thoroughly cleaned and women from Ntandire, Bangwe, Chilomoni and other townships were engaged to winnow the maize grain and they were able to economically sustain themselves. We had cases where husbands were just drinking beer at home, sure that the wife would bring something at the end of the day, and we saw women carting K1, 000 or K2, 000 home daily and, at the end of the month, that is K30, 000 or K60, 000. The winnower maker also benefitted because of the extra demand for winnowers. It is job creation at its best.  Secondly, the chemical supplier comes into the picture. The grain had to be fumigated and the local chemical industry did the job and got paid for that. Jobs were created, too, because extra workforce was needed to do that job. Thirdly, the bag manufacturing industry came into play because we had to package the maize grain. K550 million gross was generated by the bag manufacturing companies during that period. As I said earlier, 306, 000 metric tonnes translate into 28 metric tonne trucks, further translating into about 11, 000 truck-loads of maize and 6.1 million 50 Kilogramme bags of maize. Then, we have the actual maize inspector. Malawi maize had to conform to the standards applicable in Zimbabwe, thus inspectors had to be engaged, generating extra funds in the process while creating job opportunities. Then, we talk of transportation and the motor industry. Contracts were awarded to local transporters, who were given the monopoly to oversee the process. Extra assistants and drivers were employed by the industry. The petroleum industry also reaped the benefits of the deal because trucks had to refuel right here (in Malawi). 

But there seems to be controversy over the issue. Why didn’t you explain this to Malawians all this long?
We have explained everything, including to reporters. But our experience is that reporters seem to have preconceived ideas when they come to us and, even when we explain things clearly, they still go ahead to write what they had in mind. Not surprisingly, we have seen the media concentrating on the small issue of Zimbabwe failing to pay US$20 million, yet this (the US$20 million issue) was a government-to-government thing. As NFRA, we made sure that we paid all those who supplied the maize to us, and you never heard of anyone complaining that we had failed to pay them for services rendered of or products supplied. Locally, NFRA was able to generate K1 billion which NFRA submitted to the Reserve Bank of Malawi (RBM), and NFRA was able to say to RMB: ‘Thank you, the Central Bank’. For your information, the Government of Zimbabwe was transferring United States Dollars to RBM, while Malawians that rendered services or supplied products were paid in Malawi Kwacha through RBM. In the end, even the US$20 million came. This means, in total, we received US$220 million from the deal, which supported so many individuals and companies locally, thereby contributing to economic development. So, from this small argument, I rest my case by saying whoever condemns that (the export of maize to Zimbabwe) must be condemned. 

I understand that we have had problems with the silos, including water leakage and tilting. Should we blame this on negligence?
No. The problem of tilting, for example, was detected as early as when the silos in Kanengo were commissioned and the first lot of maize stored. So, this is not a new problem and has not come about due to negligence. The problem is beyond our making. Suffice to say we are doing everything to solve the challenges. We have a maintenance budget every year, and we have been rehabilitating the bins (silos). At the moment, we are working with the European Union (EU) and together, the EU and the Malawi Government are working on four silos. It’s a blessing that the EU has come in because maintaining the silos doesn’t come cheap. For example, the cost of maintaining each bin is 250, 000 Euros (approximately K135 million) per year. NFRA has 36 silos and this means spending about K5 billion on maintenance. We started discussing with the EU in 2011, and these are the fruits.  

Of late, Malawi has been plagued by floods, creating an artificial disaster of food insufficiency. Does NFRA have the capacity to meet our emergency needs?
We are more than ready. From now up to July, we will transfer 14, 000 metric tonnes from the silos, out of 65, 000 metric tonnes we have. 14, 000 metric tonnes is just a fraction of what we have. So, we are more than ready. Remember that our stocks are for emergency use only, and we are more than ready to provide maize stocks. 

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