The Ministry of Agriculture has confirmed that Government has issued letters of credit to all the suppliers contracted for the 2022/2023 Farmer Input Support Program – FISP, which they can claim full payments once they meet the set minimum delivery conditions.
This follows reports that had earlier emerged that most of the current suppliers for the Famers Input Support program – FISP have delayed delivering their quotas because the Government has not yet paid them and are cash-strapped.
Agriculture Permanent Secretary Green Mbozi however said the government has devised a way such that suppliers are paid immediately when they meet the set conditions.
Mbozi however admitted that the government is still owing some Suppliers dating as back as 2017. “We are paying off those that we are owing from 2017 up to date, off course we have all those records on our database and everybody that we owe up to 2021, we have a record and they are the suppliers that we are paying now.” He said.
Mbozi said as of 2021, what was owed to suppliers was about K1.6 billion but with the corporation that they have had with their colleagues at the treasury, they have been paying and currently only about K200 million was owed to the past suppliers.
“We keep on paying of course you know that there are so many c from the treasury as the demands on the treasury are high but since this is our season also we have put our stake there with the treasury and I think we have been working very well and they have been financing us when they have resources.” He said.
When asked how much has been paid for the new ones and the balance, Mbozi said, “for the new contracts, we have not yet started paying as we only started the process of redeeming the Inputs but there are thresholds that we said only when the minimum requirements are met, suppliers may start claiming and this is known by the suppliers themselves.”
He said this was done for the new suppliers as a way of ensuring that payments are done in an orderly manner and that everyone meets their contractual obligations, adding that government decided that letters of credit be issued to all the suppliers.
“The money is there sitting in the account but we just had to issue letters of credit so that every supplier, as they finish, will have worked out modalities as soon as any supplier meets the requirement entered into in the contract, they will be paid their money.”
He said it was the government’s idea that above 75% or 80% of the money for new contractors should be paid before the end of 2023 calendar. “So yes we are paying those that we owe from the past and the new ones we have just entered into the contract will be paying as they perform on the contract.”
“Our wish is that if everything goes well, we already agreed with the treasury that we probably need to make sure that the previous suppliers are paid 100 percent so that we just remain with about 20 percent for the new contracts that we have entered into with new suppliers for this year.” He stated.