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The Malawi Experience 2001-3

3. Origins of the Crisis
 
  • By 8/2000 MG had purchased 167kt through ADMARC & NFRA through loan finance (why so much, who decided and why untransparent procedures ?)


  • IMF & other donors advised stock rotation for 60kt and sell-off of rest to repay loans


  • Sales continued to mid-2001, without restocking to leave <4kt by 7/2001 – sales at low prices led to loss of over $12m and revenue not accounted for


  • Sales did not stop even when 2001 harvest indicated shortfall of ca 300-400kt


  • 8/2001 MG asked donors for support to import the 200kt both agreed as necessary


  • Donors indicated support would depend on clarity on sales revenues & decisions to allay HQ questions


  • MG declined info and proceeded to contract (untendered) 150kt in 9/2001 through expensive commercial loan finance


  • Deliveries intended by 12/2001, but logistic problems limited deliveries to 25kt


  • Lack of stocks and speculation led to 500% price rise between 4/2001 & 12/2001 and severely reduced access, as reported by NGOs from 10/2001


  • By end-12/2001 crisis apparent and discussion between donors, UN agencies and NGOs commenced, but not yet acknowledged by MG
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