Africa, Fertilizers, News, Phosphate

Malawian Government Awards Fertilizer Supply Deals to Asian Companies

Malawian fertilizer suppliers have expressed their concerns over the government’s recent decision to give substantial number of deals to supply fertilizer under the Farm Input Subsidy Program (FISP) to Asian suppliers. Local traders now feel very disappointed that the government left them out from the supply deals meant for this year’s subsidy. The government’s decision is even more surprising in light of the fact that local suppliers already have large amounts of fertilizers in stock in their warehouses.

One of the Malawian suppliers said in Lilongwe that there were “very few local suppliers who have been awarded the contracts of supplying the inputs but in very small quantities compared to Asian suppliers”. Local suppliers include for example Mulli Brothers who have been contracted to supply Chirimba Depot with approximately 2000 metric tons of fertilizers while others were offered deals to supply up to 8 000 metric tons. Companies such as Krish Trading, Paramount Holdings, Hardware Shopping Center or RTM Initiative are among those awarded contracts.

The Malawian government is trying to reform the FISP subsidy program aiming to make it more efficient and effective. Privatization of procurement and distribution of fertilizer and seeds are also being considered. Minister of Agriculture, Allan Chiyembekeza, announced that each farmer would have to give K3500 (approximately 7 USD) per bag of fertilizer in the 2015/2016 growing season, which is an increase by K3000 compared to the previous year. The FISP was launched in 2005/2006 with the aim to subsidize agricultural inputs on a national scale. The World Bank has recently said that Malawi was among few sub-Saharan African countries that keep on growing albeit at a slower pace due to some domestic obstacles to growth which prevent it from making a substantial progress on structural reforms.

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