Exchange Control (Cotton Finance) (Amendment) Order, 2026 (No.1)
Cotton merchants may now fund seed cotton purchases from local money — own savings, local borrowings or offshore funds — instead of offshore funds only, and the RBZ will set the USD/ZWL settlement ratio for the purchase price.
The Exchange Control (Cotton Finance) Order, 2008 has been reworked to drop its offshore-only financing premise. Seed cotton merchants may now access both offshore and onshore funds to buy seed cotton, and the order says expressly that they may use their own savings of any kind, or borrow or raise funds on the local market, to finance production and the buyback of seed cotton.
The pricing rule is also restated: the purchase price of seed cotton is denominated in United States dollars, and the settlement ratio between foreign currency and Zimbabwean currency is whatever the Reserve Bank determines from time to time. That leaves growers with a USD-denominated price but a currency mix set administratively rather than by the order.
Where a merchant finances a grower, the amount advanced may be set off against the price of the seed cotton the grower later sells to that merchant — putting contract financing and payment on the same footing.
Supporting changes follow from the same shift: the definitions of "interbank market" and "Memorandum of Deposit Scheme" are repealed, the word "offshore" is deleted from section 8 and from Form EC Cot 1, and section 9's second subsection on returns is deleted. Form EC Cot 2 is replaced with a simpler weekly cotton buying return giving the merchant's name, the period, and for each farmer the kilograms and US dollar value of seed cotton purchased.
What changed
- Seed cotton merchants may access both offshore and onshore funds to buy seed cotton
- Merchants may use own savings or borrow locally to finance production and buyback
- The purchase price stays denominated in US dollars, with the RBZ setting the foreign/local currency settlement ratio from time to time
- Grower financing may be set off against the price of seed cotton sold to the merchant
- Definitions of 'interbank market' and 'Memorandum of Deposit Scheme' repealed
- References to 'offshore' removed from section 8 and Form EC Cot 1
- Section 9(2) on returns deleted and Form EC Cot 2 replaced with a weekly cotton buying return
Who this affects
- seed cotton merchants and ginners
- contract cotton financiers
- cotton growers selling to merchants
- banks lending to the cotton sector
- exchange control compliance officers filing EC Cot returns
Plain-language summary — not legal advice. Always read the full instrument.