STATE-RUN cotton firm, Cottco Holdings Limited (Cottco), has made headways in clearing a debt owed to farmers paying 90% of the US$23,7 million outstanding payments, NewsDay Business has learnt.
Last October, the firm revealed that it has begun engaging Treasury, the central bank and financial institutions to raise US$6,8 million to pay off cotton farmers.
Farmers were owed these monies after Cottco had failed to pay for the delivery of the crop, a move which has started pushing these farmers towards side marketing.
In a weekly update, the company said it had paid 90% it owed to the farmers and was now left with 10% translating to US$3,2 million which would be cleared soon.
“US$20,5 million out of US$23,7 million has been paid to cotton farmers, 90% of the outstanding payments has been settled,” read part of the update.
In a trading update from September 1, 2023, to January 31, 2024, the company said it was looking forward to clearing its outstanding dues to the farmers by the end of this month.
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By the end of January, the company had managed to settle 83% or US$19,6 million of its dues from the US$23,6 million it owed farmers.
However, in an interview with the paper, Cottco corporate communications manager Constance Makoni-Thodhlana did not confirm whether they would meet the end of March period to clear the arrears.
“The outstanding payments will be cleared soon,” she said.
Cottco said it had settled ZWL$7,1 billion out of the ZWL$32,5 billion it owed farmers.
Makoni-Thodhlana said that the ZWL payment would be settled on an ongoing basis depending on funds availability.
Cotton is one of the biggest sources of foreign currency in the country.
Lands, Agriculture, Fisheries, Water and Rural Development minister Anxious Masuka revealed last year that the cotton sector recorded a 61% increase in production to 90 085 metric tonnes (MT) in the 2022/23 agricultural season.
This was against 56 044MT from the 2020/21 season.
With the crop being drought resistant, the cotton 2023/24 is expected to remain resilient against the current El Niño-induced drought.
Cottco is the largest cotton producer in the country and is listed on the Zimbabwe Stock Exchange.