28 August 2007

Zimbabwe: Give Fertilizer Sector Priority On Power


Harare — ZIMBABWEAN farmers require large amounts of artificial fertilizers if they are to produce decent harvests.

It makes sense, where the raw materials exist locally, to produce these fertilizers in Zimbabwe.

Local manufacture minimises expensive transport, makes the best use of limited hard currency, boosts local industry and provides jobs for Zimbabweans.

It also ensures that the actual chemical make-up and the formulas are exactly what the farmers need and want.

Zimbabwe built up a major fertilizer industry, centred around the phosphate deposits at Dorowa and the air liquefaction plant in the Midlands.

The country is fortunate in having phosphates among the scores of minerals it is blessed with.

These rocks are valuable, and were the cause of colonial wars in the 19th century and have made the solution of the Sahawari conflict in north-west Africa, a major headache for decades.

But the owner of the mine, Chemplex Corporation, has closed it temporarily citing persistent power cuts.

Considering just how crucial this mine is to Zimbabwe, providing one of the three major fertilizers that the entire agricultural sector requires, it seems there is a good case for it to be given a high priority when it comes to allocating electricity.

Many other preparations for the forthcoming season, including special allocations of electricity to farmers, will come to naught if there is not enough phosphate.

Nitrogenous fertilizer is slightly different.

The air liquefaction system used at Sable Chemicals was designed and implemented when Zimbabwe had surplus cheap hydro power from Kariba South.

Power is now scarce and expensive.

But a whole chemical industry has been built from that day using this plant, the liquid nitrogen largely going to fertilizer and the liquid oxygen and the rare gases being used in other industrial and chemical processes.

Here we suggest a cost-benefit study, comparing the costs of importing electricity to make fertilizer and oxygen with the costs of importing other nitrogen feed stocks. We suspect that local production will remain the better option, especially once the scarcity of foreign currency is factored in.

If that is the case then Sable should, like Dorowa and its downstream plants, be given special power priority, particularly in the run-up to the farming seasons.

Pricing remains a problem.

But fertilizer is not something that Zimbabwe can do without. It either has to be made locally or imported, and imports require both foreign currency and high transport costs.

It must be possible to compare the cost of a tonne of Zimbabwean fertilizer with the cost of a tonne of the same quality imported product.

We suspect that even if there are inefficiencies in the Zimbabwean manufacturing processes, the landed cost of the local product will be lower than the landed cost of the import, simply because of the transport savings. When foreign currency availability is factored in the local fertilizer it is likely to be a bargain.

If that is the case, it once again makes sense to ensure the Zimbabwean product is available by pricing it correctly.

It is not a case of working out what is or is not affordable - it is a case of using either Zimbabwean fertilizer or foreign fertilizer.

We have argued before that some sort of formal board, bringing together the Government, the fertilizer chemical industry, the farmer organisations, Zesa Holdings and the Reserve Bank of Zimbabwe is needed to ensure the right amounts of the right fertilizers are available at the right time at the fairest possible price.

There is still a little time left to sort this all out and we hope the best possible use will be made of that time.

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