Zimbabwe - Overseas Development Institute

How do the p r i c e s of d o m e s t i c a l l y produced f e r t i l i z e r s
compare with comparable p o t e n t i a l imports? Figures for 1981 and
for 1986 i n d i c a t e not only a high l e v e l of e f f i c i e n c y , measured
i n terms of DRCs, but also a range of measures f o r a l l four firms
of l e s s than u n i t y with, a d d i t i o n a l l y , only a f a i r l y small l e v e l
of e f f e c t i v e p r o t e c t i o n . The relevant summary data are rs^produced
i n Table 17'2 9 _
Table 17
Competitive Measures for Zimbabwe's Fertilizer Industry
Study/Year EPC DRC DRC Range
25%
Devaluation
Jansen, 1981i 1.17 0.83 0.66 0.65 to 0.99
World Bank, 1986^
Plant A 1.41 0.72
Plant B 1.43 0.91
Plant C 0.10 0.28
Motes: 1. Calculated prior to the substantial hikes in electricity
prices.
2. The World Bank figures, in contrast to the Jansen ones
use shadow rather than estimated world prices.
Source: Jansen (1982) and World Bank (1987).
As for the future, not only have a number of reports
recommended the i n s t a l l a t i o n of f u r t h e r f e r t i l i z e r manufacturing
capacity i n the country''" but the Government i s involved i n
analysing s p e c i f i c plans f o r expansion. One f i n a l and worrying
contemporary problem r e l a t e s to the issue of p r i c e s . The p r i c e s
of a l l f e r t i l i z e r products are s t r i c t l y state c o n t r o l l e d . Both
the World Bank and the companies themselves have argued r e c e n t l y
that the r e s u l t of recent p r i c i n g d e c i s i o n s i s that p r o f i t s have
been squeezed to the extent that the major f e r t i l i z e r firms have
not had funds to invest i n the necessary maintenance and expansion
of t h e i r p l a n t s . However, and i n s p i t e of t h i s c o n s t r a i n t ,
one of the companies, Zimbabwe Phosphate I n d u s t r i e s (Zimphos), i s
completing a s u b s t a n t i a l investment p r o j e c t j o i n t l y with the
Anglo-American Corporation, valued at $17 mn, to expand the l o c a l
production of s u l p h u r i c a c i d such that from the end of 1987
imports of elemental sulphur w i l l no longer be necessary. As
some 85% of the a c i d i s used to produce superphosphate ' f e r t i l i z e r
and the increased q u a n t i t i e s manufactured w i l l , at l e a s t f o r the
next f i v e years, exceed domestic demand, the completion of t h i s
project w i l l not only save f o r e i g n exchange through e l i m i n a t i n g
imports but w i l l earn f o r e i g n exchange through exports.
Besides f e r t i l i z e r the story of the other inputs supplied by
manufacturing i n d u s t r y can be quict:ly t o l d . Stocltfeeds are
almost e n t i r e l y l o c a l l y produced from inputs themselves supplied