By Anyway Yotamu
Zimbabwe’s sovereign wealth vehicle, the Mutapa Investment Fund, has injected US$10 million into the struggling Cotton Company of Zimbabwe (Cottco) to help settle outstanding debts to transporters, workers and farmers during the current cotton marketing season.
Speaking before the Parliamentary Portfolio Committee on Lands, Agriculture, Water, Fisheries and Rural Development, chaired by Chivi South MP Soul Maburutse on Tuesday, Mutapa Investment Fund Chief Executive Officer John Mangudya outlined the rescue plan.
“We are putting in place some funding facilities, structures to ensure that Cotton Company of Zimbabwe will be able to purchase the cotton from the farmers and also to ensure that the company will be able to pay its legacy debts, which are basically the money owed to the workers of US$3.1 million, to the transporters of US$1 million and the legacy payment to farmers of US$6 million,” said Mangudya.
Cottco, a state-run cotton buyer now under the Mutapa Fund, was suspended from trading on the Zimbabwe Stock Exchange in 2014 due to mounting debts.
Mangudya said US$5 million of the pledged funds had already been disbursed.
“So we are putting in place those structures in place to ensure that the Cottco will be able to pay. And that year we are starting by the current Cottco, and we have already disbursed US$5 million so far out of the US$10 million for them to be able to purchase the cotton whilst we are putting in place measures to pay the outstanding legacy debts,” he said.
In a bid to curb abuse of farming inputs under the Presidential Inputs Scheme, Mangudya told lawmakers that Cottco plans to introduce a credit card system for registered farmers.
He explained that the card would allow farmers to purchase inputs from approved merchants, with the system linked to banks such as POSB and AFC and supported by biometric data from the Registrar General’s office.
The proposed card, he said, would be exclusively for input purchases and would include the farmer’s biometric details to prevent fraud and multiple claims.
Mangudya assured the committee that Cottco’s nearly US$11 million in legacy debt would be cleared within the next six months, and the company’s accounts updated by early next year.
