Harare – Cotton Company of Zimbabwe (Cottco) has been placed under a voluntary business rescue plan after years of financial distress, weak balance sheets, and an inability to pay salaries, creditors, and other obligations, lawmakers heard.

Cottco board chairperson, Sifelani Jabangwe told the parliamentary portfolio committee on Agriculture, Mechanisation and Water Resources Development that the parastatal could not survive on its own and had effectively been operating as “an agent of government.”

“Cottco’s balance sheet has generally been weak. It has operated mostly with support from government on inputs and also raising funding for the annual crop,” said Jabangwe

“We have had an accumulation of creditors and in order to allow a systematic and smooth payment of creditors, it was seen fit, in consultation with our shareholder, that is the Mutapa Investment Fund that we put the business under corporate rescue so that a solution can be obtained.”

He revealed that the 2024 cotton production season was severely hit by the El Niño drought, and since then the company has been unable to meet its financial obligations.

“The challenges have been carried forward into 2026. Yes, we had the budgets but we could not get the working capital. We have had an accumulation of outstanding payments to our rural creditors, employees, transporters, and rural district councils (RDCs). Right now, a few days into the marketing season, we have no guarantees and we have not been able to secure funding,” he said.

Jabangwe revealed that some creditors had already taken legal action against the parastatal, threatening to attach its property—a move that would have destroyed the company.

“Some of our creditors have taken us to court with some threatening to attach our property, and this would have destroyed Cottco. In order to protect Cottco and allow a systematic process, we decided on the voluntary business rescue,” he said.

The Mutapa Investment Fund (MIF) Chief Executive Officer told parliament that while Cottco had been receiving state funding but the company had been yielding little output due to what he termed a “financial haemorrhage.”

Hè offered a stark assessment of government funding channelled through Cottco in order to enable its operational viability.

“Government has been religiously funding farmers through Cottco. The output is however very little, and we noted that there is financial haemorrhage—the more we put money into Cottco, the more we got nothing,” Mangudya said.

“We agreed with the board’s decision on the voluntary business rescue in order to save Cottco.”