BMC�s P300m bailout gets Parly nod
Staff Writer | Wednesday August 5, 2015 16:52
The request that was tabled by the Minister of Finance and Development Planning, Kenneth Matambo was approved with the majority of legislators supporting it. When presenting the request, the minister noted that the funds are required to finance the commission’s operational losses for the current financial year, which has put pressure on the commission’s cash flow.
“Funding for the requested amount will come from the reduction of annual provisions for the Horticulture and Water Development and Agricultural Support Scheme programmes,” he said.
Matambo said it is anticipated that there will be under-spending in these projects due to delays in the commencement of the construction of the Zambezi Field Services sub-project as well as low spending under Integrated Support Programme for Arable Agriculture Development (ISPAAD) as a result of drought. Matambo therefore stated that the request would not increase the total ministerial annual provision.
BMC is currently sitting on a debt worth P760 million from both government and other financial institutions. Due to perennial heavy losses, the government has been forced to pump a lot of money into BMC that accumulated to P594 million in loans.
In addition, BMC borrowed P125 million to upgrade the Francistown plant and another P50 million forms Banc ABC to resuscitate the Maun plant.
Last year, the commission obtained a P300 million loan from Standard Chartered Bank in an effort to speed up payments to farmers seeking cash on delivery for cattle purchased.
BMC is currently implementing a turnaround strategy, which government officials believe would require P600 million to complete.
In 2013, the commission bounced back to profitability, recording P26 million after tax profits. This was a reversal from the huge successive losses of P324 million in 2012 and P87.82 million in 2011.