Thursday, July 18, 2024

ADMARC retrenchment to cost K8.9 billion

Agricultural Development and Marketing Corporation (Admarc) Head of Administration and Human Resources Ethel Zilirakhasu on Wednesday said that the company needs about K8.9 billion to properly conduct the retrenchment exercise it announced.  ZiliraKhasu said this when she led a four-member team that appeared before Commissions, Statutory Corporations, and the State Enterprises Committee of Parliament.

On August 30, 2021, Minister of Agriculture Lobin Lowe announced the closure of the longtime loss-making grain trader on grounds of alleged underperformance, theft, and fraud by its officers. In response to the closure, ADMARC declared that it will retrench its 4,063 employees, leaving only 1,565 establishments, in an effort to lower the business’s labor costs and distribute dividends to shareholders.

The State Grain Trader has a budget of K6.6 billion for the layoffs, according to Zilirakhasu, and would need an additional K2.2 billion to pay for pension arrears that the business has been failing to pay to an administrator.

“We have so far calculated and computed retrenchment packages for all the employees and we need about K8.9 billion. Apart from pension funds, Admarc owes its employees bonuses and that is how the figure is being arrived at,” she said.

Zilirakhasu also disclosed that Admarc has so far submitted a request to Treasury for possible funding and that they are engaging the Ministry of Labour for guidance to ensure that the exercise happens in accordance with relevant laws.

But Minister of Finance Sosten Gwengwe said in a separate interview Wednesday that he had not seen the said request.

“[However], we will review the request once it is submitted,” Gwengwe said.

Chairperson for the Commissions, Statutory Corporations and State Enterprises Committee of Parliament, Isaac Kaneka, argued that the retrenchment does not make business sense, saying it is too costly.

He said his committee will soon summon the Treasury and the Ministry of Agriculture, which shut down Admarc and sent all employees on three-month forced leave.

“There are so many parastatals that are in similar situations; they are making losses for years on end but the government has not thought of shutting them down and laying off people, a development which could cost citizens billions of Kwacha. So we are surprised and we want to meet those that made this decision about Admarc,” Kaneka said.

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