LILONGWE-(MaraviPost)- The embattled Central Medical Stores Trust (CMST), owes local pharmaceutical manufacturers about MK15 billion, a development which is likely to suffocate the Buy Malawi Campaign, it has been learnt.
CMST loan dates back to 2014 after local firms through its networking entity Pharmaceutical Manufacturers Association of Malawi (PMAM), signed the Memorandum of Understanding (MOU) on the Buy Malawi Campaign with Government in 2013.
In the MOU document, which The Maravi Post is in possession, and signed by Nebert Nyirenda on behalf of Secretary for Industry and Trade, Albert Khuwi (for Secretary of Health), Evelyn Itimu (CMST Board Chairperson) and Abraham George for PMAM Secretariate, states that the agreement was to support the Campaign through the reduction of procurement of most imported pharmaceutical products, due to huge expenditures and loss of foreign exchange.
The MOU recognized five local manufacturers of Medicines and medical suppliers that would specifically promote the campaign.
The MOU clearly stipulates that local firms will benefit from a five-year corporate tax holiday, and that upon completion of supplying the medicines, payments would be made after 30 days.
The Maravi Post had further confirmed that since local manufacturers started supplying medical materials, the CMST fails to honour its obligations to pay the suppliers in the stipulated timeframe.
However, various reports allege that the CMST has m fraudulently paid upfront some foreign Asian companies on the same service; these appear to favored Government officials’ personal interests while it ignores local firms.
Foreign companies are said to be favored as money exchange hands between some Government officials and Asians businessmen.
The development is suffocating the “Buy Malawi Campaign’s” binding documents the manufacturers and Ministry of Health signed.
For instance, the Trust owes one pharmaceutical MK2.8 billion since 2016 that has led the company to accumulate huge interest rates from banks for failing to pay its loan in good time.
Currently, the company is paying US$200 (MK150,000) per day to banks, which will eventually lead to its closure for accumulations of debt.
The company’s Chairperson David Bisnowaty, who is also a Member of Parliament (MP) for Lilongwe City Centre Constituency, said failure to get payment in time paralyzes the zeal for the Buy Malawi Campaign.
Bisnowaty said despite being a politician, the company deserves equal treatment with other companies to sustain its business operations.
“Our hands are tied up on how best to sustain the business. CMST owes the company about MK2.8 billion, which for selfish reasons, it has failed to pay us including other local manufacturers. This is contravening the contractual agreement we made through our association to support the Buy Malawi Campaign.
“Local firms are usually not paid in good time as some officials at CMST favors foreign companies, who pay brides to be paid in good time upon doing the same service we do. Can the Anti-Corruption body find out what is happening at this institution to rescue us,” he said.
CMST Executive Director Feston Kaupa did not pick up his mobile telephone on several occasions when we contacted him to enquire on this matter.
The Trust has repeatedly been embroiled in luxurious expenditures. Last December, the institution splashed cash to its employees for Christmas, forgetting to pay debts to its suppliers.
On several occasions the Treasury informed the public that Government is doing its best to rectify the problem but the situation remains stagnant.
