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JUST IN: $300 million cotton payments locked in Ecocash merchant lines

15 Jul, 2020 - 10:07 0 Views
JUST IN: $300 million cotton payments locked in Ecocash merchant lines

The Herald

Herald Reporter
More than 400 000 small-scale farming households are suffering badly because the Cotton Company of Zimbabwe cannot pay the $300 million it owes them after outgoing payments and bulk payments were banned from EcoCash merchant lines, and a Parliamentary committee now wants immediate action so the money can be paid.

The $300 million is now trapped in Cottco accounts and needs to be unfrozen as part of the immediate measures.

Few of these farming households have bank accounts and Cottco paid what were usually modest payments for deliveries through EcoCash, which the farmers could immediately access to buy necessities.

Now Parliament’s portfolio committee on Lands, Agriculture, Water and Resettlement wants Cottco to be given immediate exemption from the ban, or wants the Reserve Bank of Zimbabwe to create, immediately, the required bank accounts for free with farmers then allowed, again for free, to transfer the Cottco payments from their bank accounts to their mobile wallets.

Committee chairman Gokwe Nembudziya MP Cde Justice Mayor Wadyajena (Zanu-PF) yesterday tabled a report in the National Assembly following a fact-finding visit the legislators carried out in Gokwe, a primary cotton area, a fortnight ago.

The committee told the National Assembly that while the Government’s decision to suspend bulk merchant payments was noble to curb illicit financial transactions, changes were needed that did not affect farmers.

“This means cotton farmers remain unpaid to date with many essentially in a desperate situation requiring urgent redress. According to previous submissions by the regulator, the Agricultural and Marketing Authority, Cotton Company of Zimbabwe enjoys around 90 percent market share,” said Cde Wadyajena.

Legislators implored the Reserve Bank to facilitate the immediate opening of bank accounts for cotton farmers at no cost to the families and absorb the costs of the accounts and of transfers to the e-wallets of the farmers.

The committee recommended another raft of immediate measures to overcome the lack of payment.

“The RBZ must within 48hrs of presenting this report to Parliament, unfreeze over ZWL300million trapped in Cottco Econet merchant lines which is meant to pay for farmers’,” said Cde Wadyajena.

“The RBZ may institute investigations into the past usage of Cottco’ss merchant lines and if any abuse is detected, punitive and corrective measures must be taken while at the same time protecting all innocent farmers.

“The Ministry of Finance must with immediate effect, issue a waiver to all cotton buying companies registered with AMA not to deduct 10 percent withholding tax from the payments to the cotton farmers.”

Cde Wadyajena, who represents thousands of cotton farmers in Parliament himself, said there was need to protect the farmers through payment of viable producer prices so as to restore the pride that has traditionally been associated with cotton production.

The committee noted that cotton output has dropped over the years due to unattractive producer price from a high of 353 000 tonnes in 2 000 to 74 000 this year.

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