29 June 2014

Zimbabwe: Govt Owes Seed Co, Promises to Pay

GOVERNMENT has acknowledged its US$32 million debt to Seed Co and agreed to settle it inclusive of interest, the seed producer said last week.

Seed Co supplied government with seeds during its interventions to cushion farmers against hardships especially during cropping seasons.

Speaking at the company's analyst briefing in Harare on Friday, Seed Co group chief executive officer Morgan Nzwere said the debt was fully acknowledged, adding that government was facing liquidity challenges making it difficult to predict when this amount would be received.

"Government has acknowledged the amount and the interest, but what they have said is that they are looking at the issue of Treasury Bills [to raise money]. Government is trying to raise money for some of the current debts in the mixture of repayment using Treasury Bills and cash," Nzwere said.

"We don't know when government will raise the cash."

He however, said this season, seed would be sold on first-come-first-serve basis due to limited stocks.

"Government is a very important customer. We can't say we will not be selling to government but now they are not a primary customer. We will be selling on a first-come-first-serve basis because the stocks are finished," Nzwere said.

"It's not a secret that there are liquidity challenges in the market. In the past we have gone to government and said buy seed for the people, but this year we are not going to government because we don't have the seed in the warehouse."

Nzwere said seed volumes were now sitting at 18 600 metric tonnes from a high of 49 700 metric tonnes two years ago.

He said the 18 000 metric tonnes would cater for all its operations across Africa.

Nzwere said the coming agricultural season was likely to encounter shortages due to limited stocks. He said the group was putting in place provisional measures to import seed if the need arises.

"In Zimbabwe, we are actually expecting a shortage of seed. We are actually putting in place some contingent plans to import seed from Zambia to meet the demand in the market. But if the demand is not there from the open market, then we are not going to be importing from Zambia," he said.


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