HomeBusiness DigestGovt deal set to ease fertiliser shortage

Govt deal set to ease fertiliser shortage

GOVERNMENT has signed a US$56,3 million fertiliser and seed deal with the South Africa headquartered African Investment Group (AIG) that will see GMB depots nationwide resuming distribution of the commodity at a large scale by month-end.

The availability of the fertiliser is expected to ease the current shortage of the commodity, which was threatening the 2009-10 farming season.
The deal between government and the AIG was inked last December.
Enoch Chihana, AIG marketing director, told businessdigest on Monday that the distribution of the imported fertiliser would be speeded up as his company would physically deliver the commodity to GMB depots as agreed in the deal.
There are 84 GMB depots in the country.
“We are not new in Zimbabwe. We feel we have come at a very crucial time. We have a vision to see Zimbabwe regaining its status as the breadbasket of southern Africa,” Chihana said.
As of Monday, Chihana said,
34 000 tonnes of fertiliser have since landed into the country.
According to a supply contract for the fertliser and seed between government and AIG, 40 000 tonnes of basal fertliser valued at US$22,6 million, 5 900 tonnes of Urea valued at US$3,3 million,
32 000 tonnes of ammonium nitrate valued at US$18 million,
5 000 tonnes of hybrid maize valued US$18 million and
1 000 tonnes of sorghum valued at US$1,3 million.
Zimbabwe needs about 650 000 tonnes of fertilisers each year.
“Whereas the government of the Republic of Zimbabwe represented by the Ministry of Agriculture, Mechanisation and Irrigation Development (as the purchaser) desires to procure basal fertiliser and seed (commodities) from AIG, a company duly organised and existing under the laws of Switzerland (as supplier) for development or agriculture in Zimbabwe,” reads part of the agreement.
Government was forced to import the fertiliser after local companies failed to produce enough because they were facing problems procuring raw materials.
“The total price of the supply contract is US$56,3 million inclusive of all costs up to the receiving depots,” reads the agreement.
A copy of a government guarantee in the possession of businessdigest showed that CBZ Bank had agreed to be the principal borrower on behalf of Zimbabwean farmers to secure a buyers credit facility not exceeding US$56,3 million.
“The minister (Elton Mangoma) being duly authorised and acting for and on behalf of government of Zimbabwe does hereby guarantee by binding the said government as surety to CBZ for the repayment by the beneficiary farmers of the value of agricultural inputs received up to a total amount not exceeding US$56,3 million in the event that the beneficiary farmers default,” reads the government guarantee.
Mangoma said any liability incurred in terms of the guarantee should only be called up by CBZ after it has provided satisfactory proof that it has exhausted all available legal channels for recovering any outstanding debt from the beneficiary farmers.
Agriculture, Mechanisation and Irrigation Development Minister Joseph Made was recently quoted saying it was important that companies awarded tenders to supply the country with the fertiliser delivered to GMB depots speedily for collection by farmers due to the shortage.
“It is very important that the companies that won the tenders supply GMB with speed,”
he said.
Farmers had been accusing Made of neglecting them and feared they would lose their properties after failing to repay loans advanced to them.
Farmers were using their immovable property as security when securing loans from
banks.
“We have had some quarrels with the Ministry of Finance but I am very grateful for the spirit we have struck in working with speed to ensure we deliver the commodities,” Made said. “The two ministries are now concentrating on the speedy delivery of the fertilisers to farmers. We already have fertilisers in stock and we are expecting more deliveries.”

 

Paul Nyakazeya

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