Zimbabwe’s cotton sector is under renewed scrutiny after John Mangudya warned that Cotton Company of Zimbabwe is failing to generate returns that justify the level of funding being poured into it, while lawmakers raised concern over the treatment of farmers.
Mutapa Investment Fund CEO Dr. John Mangudya told Parliament that the company’s financial model is unsustainable, with inputs consistently exceeding output value.
He said authorities are now faced with difficult decisions on whether to prioritise paying farmers, servicing bank obligations, or rescuing the business itself, noting that Cottco is weighed down by debt and liquidity pressures.
“As long as the input cost is higher than the value being generated, there is a problem,” Mangudya said, adding that continued funding without reform only deepens losses. “If you were running a business, would you continue putting money into it, or step back and reassess?”
He revealed that government has been “religiously” funding cotton production, but the returns have remained weak, forcing the company into voluntary corporate rescue proceedings to stabilise operations.
The restructuring, he said, is aimed at allowing Cottco to reorganise its finances, pay farmers through the rescue process, and restore viability going forward.
However, the intervention has drawn criticism from legislators, with Rushinga MP Tendai Nyabani expressing dissatisfaction over how cotton farmers is being treated, particularly delays in payments and uncertainty around pricing.
Nyabani argued that farmers—who are the backbone of the cotton value chain—are bearing the brunt of the sector’s financial challenges, despite government support schemes intended to boost production.
Zimbabwe’s cotton industry, once a major export earner, has seen a sharp decline over the years. At its peak in the late 1990s and early 2000s, the country produced over 350,000 tonnes of seed cotton annually, driven by a strong smallholder base and viable pricing structures.
In recent years, output has fluctuated significantly, with production dropping to below 30,000 tonnes in some seasons, before recovering modestly to around 80,000–100,000 tonnes in better-performing years under government input schemes.
Despite these efforts, analysts say the sector remains constrained by high input costs, low global prices, side marketing, and inefficiencies within Cottco’s operations.
The latest developments highlight a deepening structural crisis in Zimbabwe’s cotton value chain, with policymakers now under pressure to balance farmer welfare, corporate sustainability and broader agricultural recovery.
