Zimbabwe plans to revive beef industry

Zimbabwe’s Cold Storage Company (CSC) is set to be capitalised.

The Zimbabwe government recently announced it had found investors to commit over
US$48 million to restore CSC, which had lost markets and investment, and accrued significant debt.

Formerly the Cold Storage Commission, CSC had to dispose assets to pay debts estimated at over US$23 million, including salary arrears of US$3,5 million.

Joseph Made, minister of agriculture, mechanisation and irrigation development, told the national weekly, The Sunday Mail, that parties from the United Arab Emirates, Switzerland and Rwanda were to invest over US$48 million in CSC.

“We are undertaking surgical work at the Cold Storage Company, which will superintend Command Livestock, which targets growing livestock and beef exports,” Made said.

The investment should help boost breeding, acquire skills, upgrade CSC infrastructure, and negotiate its debt overhang – an obstacle to more investment. The foreign investment news follows an announcement last month (May 2017) that the country’s pension fund, the National Social Security Authority, would invest US$18 million in CSC.

But Eddie Cross, economist and formerly chief executive officer at the CSC, argues that it is time to consider privatising the company, even without foreign investors.

He said CSC’s problems were not financial and could not be solved by throwing money at them, and that “as [a] state-owned company the CSC cannot function as it should without the cattle producers and the meat industry being involved”.

“In my view the CSC could be privatised today, with 100% Zimbabwean control at no cost to the state; in fact I believe the state could recover, in full, the value of the loans assumed from CSC.”

Cross suggested Zimbabwe adopt Kenya and Namibia’s approach, and sell CSC and its assets to the beef industry. Namibia sold its Meat Corporation to the industry on a 25-year loan, which was paid back in 18 years.

Despite Cross’s comments, the country’s Commercial Farmers Union welcomed the news, confident that the investment would grow the beef industry and revive its meat exports.