Arda needs $25mln working capital, to retrench 50pct HQ staff

Arda needs $25mln working capital, to retrench 50pct HQ staff

HARARE, June 23 (The Source) – Zimbabwe’s Agricultural and Rural Development Authority (Arda) says it requires $25 million for recapitalisation and to purchase new machinery to revive operations at its estates.

The company’s acting general manager, Willard Mbona told the parliamentary committee on agriculture that lack of capital and antiquated equipment were hampering its operations.

“There continues to be an absence of medium to long-term cheaper finance for the agriculture sector to be able to support our operations. The situation is currently compounded by the cash squeeze and the limited credit that is in the banking environment,” he said.

Mbano said of its 21 estates, half were under partnerships mainly with Chinese firms while the remainder required funding.

Crops and livestock production for 10 estates required  working capital of $12, 5 million and $12,3 million for capital expenditure, he said.

He said the company was accruing huge overhead costs to maintain aged equipment which was over 55 years old and vehicles that were aged over five years, which continuously broke down.

New machinery would cost $4,4 million while new vehicles and computerization of its manual system would require $1,3 million.

The company is also planning to go into value addition on the 10 estates and introduce a milking parlour, storage tanks and milling plants worth $1,9 million.

It also plans to bring up its livestock to the optimal levels and acquire both small and large stocks at a cost of $1 million.

Mbona also said the high cost of utilities such as water and power were an additional burden.

“If we compare our water charges on agriculture regionally it’s huge, the price of water is very high. It is an area that I have been pleading with Zimbabwe National Water Authority  (ZINWA) and (power utility) ZESA for some time,” he said, adding that Cabinet was now dealing with the matter.

He said late payment of produce by the Grain Marketing Board was also affecting the company’s operations.

“By the time you get paid by GMB, your debt has soared and when you continuously go into debt and are in farming it’s not a reasonable situation,” he said.

He said failure by the shareholder, government to provide funding and the absence of a substantive general manager for the past five years also presented another challenge.

Mbona said government had approved the disposal of its underutilised assets and expected to use the revenue to revive some of its operations as well as attract competent and qualified staff to manage the estates.

The authority is currently retrenching half of 53 workers at its head office.

“The board has approved it and it is now with the Retrenchment Board,” he said.