99-year leases now bankable

Minister Chinamasa

Minister Chinamasa

Elita Chikwati and Brenda Ziga
FARMERS can now use the 99-year leases to borrow money from the banks after Government and bankers ironed out sticking points that made banks reluctant to accept the leases as security.

The move, barring El Nino-induced drought, is expected to boost agricultural production and ensure maximum land utilisation.

In an interview yesterday after addressing the 29th Joint Staff College course students in Harare, Finance and Economic Development Minister Patrick Chinamasa said Government and bankers had cleared outstanding issues and came up with a draft tradeable document.

“We have successfully, in consultation with the Ministry of Finance and Economic Development, Ministry of Lands and Rural Resettlement, Ministry of Agriculture, Mechanisation and Irrigation Development and the Bankers’ Association of Zimbabwe (BAZ) come up with a draft that incorporates tradable features. This means that when granted the 99-year lease one can use it as a document to go and borrow money.

“The major challenge affecting agricultural production right now is lack of funding. So, to encourage commercial banks to fund agriculture, we need to come up with appropriate legal issues that make it possible,” he said.

BAZ executive director Mr Sij Biyam could not confirm the development yesterday but asked for questions in writing.

Cde Chinamasa allayed fears that farmers may lose their land after failing to pay back loans and said farmers should be willing to work hard and settle their debts.

“The issue about farmers losing their land means we will be planning to fail or planning not to pay back loans. We are not planning to fail.

“Farmers should develop a culture of paying back loans. It is a bad culture to default as this will affect economic growth. We will certainly build safeguards with respect to who will buy the land if the farmer loses it. We will never allow anyone with a farm to purchase a farm or hold another piece of land,” he said.

Cde Chinamasa said agriculture was the mainstay of the economy and Government was assisting the sector to boost productivity.

“We cannot allow the 14,5 million hectares of land to become another communal area, to become dead capital.

“Boosting productivity is not a once-off thing. As we face new challenges, we must confront those challenges in a way of getting out. The objective has always been to be productive,” said Cde Chinamasa.

He said Government was also in the process of remapping farms with financial support from the European Union and the United Nations Development Programme.

Treasury has also provided resources to beef up the capacity of this remapping exercise.

Cde Chinamasa said the results of the exercise would inform key policy decisions such as valuations, compensation, issuance of permits and tradeable lease agreements.

He said by giving farmers permits and leases, they would have security of tenure and be able to develop their farms.

“It is not fair for someone to have a piece of land which can be taken away from him willy-nilly. The offer letter states that the piece of land can be withdrawn by the minister at any time.

“This shows farmers do not have security. Because they do not have security, they will not invest into the agricultural land. If we continue like that, it means we cannot improve agriculture production. We want to make agriculture the mainstay of the economy, to make it productive and to give farmers security against ourselves as Government,” he said.

Cde Chinamasa said the agriculture sector was important as 70 to 90 percent of the population depended on the industry.

He said Government was also working on encouraging irrigation as rain-fed agriculture was becoming unviable due to climate change.

“We are also looking at value addition. We should transform ourselves from exporting raw materials but should add value to the products,” he said.

Cde Chinamasa said Government would continue to improve the macro-environment by promoting policy clarity and consistency, protection of investment, addressing cost and ease of doing business as well as infrastructural bottlenecks among others.

“Zimbabwe is poised to achieve rapid and inclusive growth. The initiatives that Government is introducing will help mitigate the effects of drought given the importance of agriculture in Zimbabwe as well as setting a strong foundation for sustainable development,” he said.

Pin It
  • Wakisai

    We’ve seen this same headline frequently repeated over the last few years, but details of Government guarantees allowing 99-year lease transferability and tradability are never disclosed to the public, with little trust manifest by financial organisations.
    As long as banks and other lenders do not have freedom to dispose of and sell 99-years leases as they see fit, no great value can be placed on any measures backed by a bankrupt Government that frequently backtracks on its promises.

    • tafamutekwe

      Precisely. How can a bank possess and dispose of a piece of land that is statutorily still regarded as State land? The Minister’s statement though well meant is not credible assurance from a government that has no clear cut land policy with Ministers’ and even the President, crossing each others pathways intermittently. In the event that these pieces of farmland miraculously become bankable collateral then the bone fide owners should be the dispossessed ex-farmers who had title deeds over them not the Johnny-come-lately’s who merely impounded them or were handed the land on a silver platter without even parting with a 5 cent bond coin.

    • Farai

      All this means is that a bunch of party supporters who were given land for free can now take out loans against a free asset and if it isn’t paid back who cares. Therefore, the banks will become the biggest land owners in Zim and this will create an environment for commercial farms to flourish. Mokorkoto government of Zimbabwe this is the best land policy you have ever made.

  • Gary WekuZviyambe

    He said Government was also in the process of remapping farms with financial support from the European Union and the United Nations Development Programme”
    But you always castigate anyone who mentions the EU or UN when it comes to land. Are you saying that only ZANU-PF is allowed to work with the same organizations which they claim are “detractors and evil Europeans”?

  • Ramba

    There is no security of tenure on those farms, anybody can wake up tomorrow to find a new comrade with an offer letter for the property and banks dont feel safe making those properties collateral for loans.

  • the 1st Hokage

    Privatize the land. Problem solved. Upgrade the rights conferred through those leases from personal to real rights, and overnight- institute willing buyer-willing seller, and then we don’t have to debate this issue anymore.

    • Collin Mackenzie

      Are you mad shut up maaaan please be more constructive when making comments don’t just pen off.

      • the 1st Hokage

        My contribution is obviously less sensible than yours. Lol! Ndimi ma dofo apedza Zimbabwe imimi.
        And just to prove it- Ok, tell us which part of privatising land ownership is not constructive? What’s your recommendation? Let’s hear you out.

  • http://mafaro.co.uk/ GENERAL MBEZO

    And it is still a DRAFT!!!

  • Andrea

    The government should fund farmers. They gave them land and did not pay back through GMB for the products(wheat, soy beans, maize) delivered. The government increased the uncertainty and risk of farming so they and not the banks should correct this.

  • succuba

    Farmers should develop a culture of paying back loans. It is a bad culture to default as this will affect economic growth – Chinamasa

    Do you not think government should have heeded this advice some years ago?

  • Stanley Tshoga

    Why are they called 99 year leases? What will happen after 99 years? Is it possible to build a mansion on leased land? Is it possible to build roads and dams? Please educate me. If these questions are not answered then we can safely say all the land has been turned into communal farming. Why is the issue of tittle deeds so sensitive? If there is fear of white farmers coming to buy back land then the government is showing a lot of mistrust on the citizens who occupy the land. If the issues of tittles are solved it wont even take 5 years to be on a successful path again. otherwise we can dream and dream again but nothing will move. Please save your current efforts!

  • Maisvoreva

    After reading the whole article I dont see the bank-ability of it. In any case why wait all the long for some 29th Joint Staff College course to make that announcement? Why not a press conference with all stakeholders present? And BAZ want guestions in writing???? This is recycled trash.

    • masiyambiri

      why BAZ failed to confrim the arrangement btw banks and gvt

  • Fresh

    …..and no comment from banks..until such announcements come from banks not failed politicians, they remain nothing but politicking

  • Zvichapera

    It is not about bankable leases alone CD Minister, it is a whole lot of other issues to with the project viability. Otherwise this will fats track selling of land to banks as most of the beneficiaries of the land reform are presiding over failing projects. If banks are notorious, they will use this to reverse the land reform, but I would like to think that they would not go that route as banks are rung with at lease some level headed people. I mean banks with real money.

  • Zvichapera

    It will be interesting to see how banks can fund the bogus farming activities, when they can not fund industries. This Minister should be just serous for once. They are now finished with diamonds and now they are on looting banks through bogus farming deals. Time will tell.