By Linda Kwanjana
AHL Group executive board chair Dan Makata says AHL has taken additional measures in its bid to deal with delays in payment of daily tobacco purchase invoices by some tobacco buyers, which is contributing negatively towards AHL capacity to pay tobacco growers and transporters.
Addressing scores of farmers senior Government officials at Mzuzu Auction Flours during the commissioning of this year’s Tobacco Marketing season, Makata said AHL relies on funds from its stakeholders to do its business.
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AHL relies on funds received from tobacco buyers to pay for tobacco growers, transporters and all who receive payments in the tobacco sales value chain,” he said.
Makata said inherent delays in bank clearing
systems for the United States Dollar denominated payments from Buyers has negative impact on the overall supply chain.
He said it takes an average of two to three
days after a buyer pays, for AHL to see the credits in its Clearing Account and the situation is worse especially when done during weekends.
Investigations undertook hours after the suspension of Tobacco market at AHL has revealed multiple multifaceted factors which are contributing to the lated delivery of funds of funds to the tobacco farmers.
Chief among the reasons is that some banks are delaying disbursements of funds deliberately for no apparent reasons
Our investigations has revealed that AHL Commenced release of payments and related electronic files to banks on 17th April 2023 two days after commencement of sales.
We have further gathered that first Farmers got
their proceeds from 22nd April 2024 due to inherent delays in the banking clearing systems.
Our reporters have on record that delays are caused by delays by some banks to process and credit tobacco sales’ payments into growers’ and transporters’ accounts after AHL Tobacco Sales
Limited has paid the banks, due to own internal challenges.
We can also reveal that as of 6th May 2024, other banks did not have serious challenges except
NBM that had system and file compatibility issues with the AHLpayment files.
We can put on record that this was an isolated challenge but unfortunately itaffected many farmers as NBM is the main disbursement bank to otherbanks.
Other factors causing the delay include payment of daily tobacco purchase invoices by some tobacco buyers, which consequently affects AHL Tobacco Sales Limited’s capacity to pay tobacco growers and transporters.
The other thing that we have noted is that AHL relies on funds received from tobacco buyers to pay tobacco growers, transporters and
all who receive payments in the tobacco sales value chain.
Our investigations have further indicated that inherent delays in clearing USD payments from Buyers since buyers are expected to settle payments within 24 hours.
What it means is that due to inherent banking system delays, it takes two to three days after a Tobacco Buyer hasissued a payment instruction for AHL to see the credits in its Main Clearing Account used to pay growers.
Now the other thing is that Dollar transfer instructions by buyers go through RBM and foreign correspondent banks mostly CITI Bank in New York and this makes AHL to wait until the credits reflect for it to release
growers’ payments to local banks.
Another factor is the delay in changing the currency since under a Directive by the Tobacco Commission which came into effectin the 2023 tobacco season, Nyasa Tobacco Company buys tobacco inDollars on the Floors but pays in Malawi Kwacha.
We can also reveal that a grower whose tobacco is bought partially by NyasaTobacco Company and other tobacco buyers is paid in Dollars forpurchases by all other buyers and in Kwacha for what Nyasa buys.What it meant is that AHL was only holding Foreign Currency Denominated Accounts on such growers’ files resulting in the Kwacha payment delays as the grower is only paid the Kwachaportion after he/she has provided AHL with a secondary Malawi Kwacha account.
We have also observed that AHL has been individually calling farmers with FCDA accounts to furnish AHL with a secondary Malawi Kwacha account to accommodate Nyasa Tobacco Company Kwachapayments for those with FCDA accounts causing a delay in the
payments for these farmers.
We managed to talk to Jacob Banda a farmer from Kapiri Mchinji who urged AHL to resolve the technical aspects being faced.
“We are farmers whatever these people are facing we cant even understand what we are saying resolve all your issues and give us money. We are also urging the National Bank to resolve their issues as well,” he said.
