Home » Industry » Govt to Consolidate U.S.$27 Million Seed Company Debt

The Government has agreed to consolidate the $27 million debt owed to Seed Co (Pvt) Limited by various Government departments for seed supplied under agricultural input schemes since 2007. Seed Co is owed about $14 million for the current 2013-2014 season while the other $13 million was accrued from the previous farming seasons through quasi Government arms.

Speaking to The Herald Business on the sidelines of the Imara Investment Conference yesterday, Seed Co Zimbabwe finance director Mrs Felistus Ndawi said the seed company is in constant engagement with Government over the settlement of the debt.

“The (Seed Co) Zimbabwe debt is made up of Government input debts from the current input scheme that was introduced for the 2013-2014 season where they owe us about $14 million,” said Mrs Ndawi.

Until now the Government which is saddled with many other debts owed to multilateral creditors, has also struggled to pay debts to local fertilizer merchants, the Zimbabwe Fertilizer Company and Windmill.

Mr Ndawi said they have reached an understanding with Government for the debt to be consolidated to ensure convenience in the payment.

“Ministry of Finance and Economic Development endorsed the idea that the two debts should be bonded to become one so that Seed Co engages only one Government arm over the debts,” she said.

She said Seed Co is aware of the Government’s financial position and they are in constant engagement to come up with solutions to settle the debt.

Part of the debt dates back to 2007 when the army carried out the national input programme under “Operation Maguta.”

The Zimbabwe Defence Forces was drawn into the input subsidy programme to avoid side dealings by corrupt officials.

Operation Maguta was used as a Government vehicle for mobilising and distributing inputs such as seed, fuel and fertilizer to A1 and communal farmers countrywide under a managed national cropping plan where some two million hectares were to be put under maize production for delivery to the Grain Marketing Board.

Under that programme, Government acquired more than 800 tonnes of maize seed from Seed Co International at about $2 500 per tonne through a credit arrangement and undertook to pay back the debt either in cash or in the form of fertilizer under a batter arrangement.

Only the Reserve Bank of Zimbabwe reduced its arrears by about half, from $6,5 million to $3,3 million, for the seed it procured for the Ministry of Agriculture in support of the programme.

Source : The Herald