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Zimbabwe: Fertiliser Sector Wants More Funding Options

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The fertiliser industry needs additional ways of meeting funding requirements so that there is adequate and timely provision of the product to give impetus to the Pfumvudza/ Intwasa and Presidential Input Scheme, a Parliamentary committee has heard.

ZFC managing director Dr Richard Dafana said Zimbabwe should consider letters of credit and other instruments to complement the Reserve Bank of Zimbabwe’s foreign currency auctions.

He said while the auction floor system was working well and had transformed funding mechanism for the fertiliser industry, additional methods were required so that companies could take acvantage of bulk discounts on raw materials.

Dr Dafana took Parliament’s portfolio committee on Lands, Agriculture, Fisheries, Water and Rural Resettlement on a tour of his company’s production plant in Southerton, Harare.

The committee chaired by Gokwe Nembudziya legislator Cde Justice Mayor Wadyajena has embarked on a tour of fertiliser producing companies contracted by Government to produce the product for its programmes.

Dr Dafana said import of raw materials in huge quantities would give them a competitive edge to negotiate for better prices thereby making the product cheaper for a farmer who is the end user.

“Right now we have an auction system floor (for forex) which has been a success story. But as ZFC we need US$50 million per year and at the auction floor we get about US$500 000 per week which is not enough to fund the fertiliser industry,” said Dr Dafana.

“With US$500 000 we will get small quantities and you cannot compete with big companies in other countries like India because you get what is called spot price, you cannot negotiate for better prices. So we need financial instruments. Those instruments must have the blessing of the RBZ.”