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The African Development Bank says there is need for local fertiliser manufacturers to devise ways of boosting production to stem increasing imports. In its monthly economic report for September, the AfDB said the country could not afford to continue relying on importing fertiliser when it had capacity to meet local demand. It said, for example, during the first half of 2013, fertiliser dominated the list of most imported products, constituting about 17,2 percent, ahead of fuel importation at about 16,7 percent.

“This failure to produce competitively is reflected in high fertiliser imports into the country, at a time when productive capacity of some local producers is low,” said the AfDB.

“Subsequently, given the demand for fertiliser, Zimbabwean companies have so much scope for investment in competitive production. Local firms should target import demand, which negatively contributes to the country’s balance of payments position, as the production shortcomings of the local fertiliser companies are costing the country heavily.”

The financial institution said although improving viability of the local industry largely remained the responsibility of the fertiliser firms, all stakeholders should also complement such efforts.

It said one such critical stakeholder was the power utility, Zesa Holdings. The AfDB also said payment of debts owed to fertiliser firms would aid in improving production.
“A constant power supply will not only enhance the competitiveness of fertiliser companies, it will also be beneficial to the country as a whole over the long term as imports are curtailed and resources are channelled into the local economy.

“It is thus critical that all stakeholders show some commitment in bailing out the fertiliser industry. There is need for a detailed focus on the fertiliser industry with the aim of coming up with strategies that can increase local production capacity in line with demand to limit the outflow of resources from the country.”

Demand for fertiliser for the 2013/14 farming season is projected at 300 000 tonnes both compound D and ammonium nitrate, compared to 280 000 in the last farming season.

The country has three major fertiliser manufacturing firms, namely Sable Chemicals, Windmill and the Zimbabwe Fertiliser Company.
At its peak, the local fertiliser industry produced over 500 000 tonnes of both ammonium nitrate and Compound D supplying the domestic and foreign markets but due to a number of constraints, the companies are failing to meet even domestic demand. —New Ziana.