Forex shortages cripple fertiliser companies

FOREIGN currency shortages have crippled the operations of fertiliser manufacturing companies in the country making it difficult to produce enough to meet the national demand.

This resulted in farmers throughout the country struggling to get fertiliser on time, particularly ammonium nitrate, during the just-ended 2020-2021 cropping season.

This was revealed during a tour to fertiliser companies in Harare, Bindura and Kadoma by the parliamentary portfolio committee on Agriculture chaired by Zanu PF MP Gokwe Nembudziya, Justice Mayor Wadyajena, pictured.

The three-day tour held this week, was on a fact finding mission to establish how the firms fared in terms of availing inputs to farmers under the government’s Command Agriculture and Pfumvudza schemes.

Zimbabwe Fertiliser Company (ZFC) managing director, Richard Dafana told the committee that the foreign currency they get from the Reserve Bank of Zimbabwe-controlled auction system was hardly enough to meet their needs.

“Top dressing fertilisers require more foreign currency than basal fertilisers like Compound D. While, we welcome the relief that the auction floor has brought to us, the challenge is that what we get is not enough.

“For example, we need US$50 million per year to fund our season yet we get a maximum of US$500 000 per week. That means we cannot fund the fertiliser industry from the auction floor. When we are buying raw materials we are often outcompeted by those who purchase shiploads because owing to our limited volumes we are charged spot prices, they are the highest,” Dafana said.

He also bemoaned the fact that the company relied more on getting government contracts which, more often than not, are approved late making it difficult to plan ahead.

Sable Chemicals chief executive officer Bothwell Nyajeka, also said that the ammonium nitrate producing company had invested US$11 million for 240 000 tonnes of fertiliser per year against a national demand of between 250 and 300 000 metric tonnes per year.

“Our biggest challenge is  access to foreign currency to import ammonia gas from South Africa because it is not locally produced. We have however, improved after the introduction of the foreign currency auction floor but it’s not enough.

“Our  production capacity is 90 000 metric tonnes per year but we are only producing for Command Agriculture,” Nyajeka said further.

On the other hand Windmill’s George Rungondo pleaded with the committee to lobby for it to be contracted for the presidential inputs scheme as it was only involved in the Command Agriculture programme, where it supplied 12  613 metric tonnes of Compound D and 8 700 metric tonnes of top dressing fertiliser.