Call to ease US$30m horticulture fund access
Edgar Vhera-Agriculture Specialist Writer
THE Horticultural Development Council (HDC) has called on the Government to ease access to the US$30 million Horticulture Export Revolving Fund (HERF).
With 14 months into operation only US$500 000 disbursed to date, a mere two percent. At the recently held second edition of the horticulture investment forum in Harare, Strategic Planning and Business Development chief director Mr Clemence Bwenje bemoaned the slow disbursement of the fund saying only US$500 000 had been disbursed to date, a two percent mark.
“The Ministry of Lands, Agriculture, Fisheries, Water and Rural Development facilitated the establishment of a US$30 million HERF a as a de-risking mechanism for private funding of the horticulture subspace. It targeted horticulture production for export and is being administered six banks (NMB, AFC, Ecobank, CBZ, CABS),” Mr Bwenje said.
The facility provides loans with a maximum repayment duration of 36 months. US$19,5 million has been supported, but only half a million has been disbursed, he said.
Mr Bwenje said among the challenges militating against speedy disbursement are that the qualification process is strenuous and the loan structure and targeting is not supporting inclusive growth where disenfranchised segments of the farming societies are onboarded.
“The facility targets formal and established entities and this is the reason why there are no individual farmers who are among the beneficiaries. The processing period is very long stretching to over six months with security standing as one of the key components defining the qualification of an applicant,” he added.
Lastly the requirement for audited financials was a hindrance to many farmers resulting in their disqualification, he continued.
HDC chief executive Mrs Linda Nielsen said access requirements for the HERF exclude beneficiaries that the fund was meant for.
“A key qualification is bankable security, which many farmers do not have. Applicants are also required to have audited financials, which adds to costs, while the processing period is also too long.
“Government needs to ease the access benchmarks to make them more inclusive. HDC stands ready to dialogue with banks and the Government on appropriate mechanisms for funding the sector,” the HDC boss said.
The Government last year launched the US$30 million HERF with Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube saying the fund had the potential to close the funding gap and spearhead increased productivity, as well as finance bankable projects with a focus on the value addition.
To access the US$30 million HERF, farmers needed to be growing an export-oriented horticulture crop, with established export markets and/or export contracts and farming track record. The banks would use project proposal and cashflows to evaluate potential funding for a farmer.
The fund attracts annual interest rates ranging from eight to eleven percent per annum if working capital and between nine to twelve percent per annum if it is capital expenditure.
HERF was for all horticultural crops that are exported like cherry peppers, peas, avocados, citrus, blue berries, strawberries and macadamia nuts. However, other key stakeholders like providers of logistics and markets can also benefit.
Meanwhile, speaking at the horticulture investment forum Netherlands ambassador to Zimbabwe, Mrs Margret Verwijk challenged the country that its US$1 billion by 2030 horticulture target was not wild but was achievable taking her country as an example.
“Netherlands exports €65 billion of agriculture products annually, yet our total country size is a tenth of Zimbabwe, like Mashonaland West province. We achieved this after decades of research, innovation and long-term investment infrastructure,” she said.
To achieve the US$1 billion 2030 target, the horticultural sector needs to grow 30 percent annually and growth exhibited in the blueberry and spices and herb section was attest that this can be achieved if other crops followed suit.