Mutapa to clear Cottco debts

Published: 22 hours ago

The Mutapa Investment Fund (MIF) has announced a bold recovery plan for troubled cotton firm Cottco Holdings, pledging to settle its outstanding legacy debts of approximately US$5 million within the next six months, with the goal of updating the company's financial accounts by early 2026.

This was revealed by MIF chief executive officer, Dr John Mangudya, when he appeared before the Parliamentary Portfolio Committee on Lands, Agriculture, Water, Fisheries and Rural Development on Monday. Dr Mangudya was briefing lawmakers on the funding and revitalisation strategy for Cottco, which is under the purview of the country's sovereign wealth fund.

Cottco, once a cornerstone of Zimbabwe's cotton industry, suspended trading on the Zimbabwe Stock Exchange (ZSE) in 2014 due to crippling debts. The firm has since struggled to recover, weighed down by unpaid obligations to workers, farmers, and transporters.

"We want to ensure that Cottco pays its legacy debts, which are the money they owe to workers — about US$3.1 million — transporters, around US$1 million, and farmers, which totals around US$6 million," said Dr Mangudya. "So far, we have disbursed US$5 million of the US$10 million owed to farmers. The aim is to clear all these debts within six months, or by early next year at the latest."

Dr Mangudya emphasised that settling these obligations is critical to restoring trust in the cotton sector and ensuring that farmers are paid promptly for the current season's crop.

He also revealed that preparations are underway to resume Cottco's trading on the ZSE, a move he said would boost transparency and attract new investment into the company. "Resumption of trading will enhance corporate governance and give investors a chance to participate in the company's turnaround," he added.

In a further move to tighten controls and curb abuse of the Presidential Inputs Scheme, Dr Mangudya announced the upcoming rollout of a biometric-linked credit card system for farmers. The system is aimed at eliminating the resale of inputs on the black market, a problem that has plagued the scheme for years.

"The card will be used exclusively for purchasing inputs and will include biometric data from the Registrar General's Office to prevent double dipping. It will be linked to the POSB and AFC banks, and usable only at registered merchants," Dr Mangudya explained.

The reforms come as part of broader efforts to revitalise Zimbabwe's cotton industry and restore the sector as a viable source of income for thousands of smallholder farmers.
- The Herald

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