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Minister Mombeshora

Business Reporter
Government will not amend the law to make 99-year leases commercially transferable just to suit the interest of banks. Minister of Lands and Rural Resettlement Douglas Mombeshora in an interview yesterday said the provision that resettlement land is not commercially transferable was provided for in the Constitution.

He said this will not be amended to suit the interests of banks.
This comes when there has been little progress in efforts to make 99-year leases for resettlement land acceptable as security to enable farmers to use the land as collateral for bank loans.

“The Constitution of Zimbabwe says land ownership will be by way of 99-year leases.
“Banks are saying that they are not going to accept leases if they are not transferable.
“We are not going to amend that Constitution.

“In other countries, leases can be tradable as security, but here it is not the case,” the Lands and Resettlement Minister said.
The minister singled out banks such as Barclays Bank Zimbabwe and Standard Chartered Zimbabwe as some of the foreign-owned financial institutions not willing to support farmers.

The minister said Government’s preoccupation was to protect the farmer from being disposed of their rights to land if 99-year leases become saleable.

He said Government will not rush into rubber stamping banks’ proposals to make 99-year leases commercially transferable.
He said it was clear that foreign banks were reluctant to support farmers citing the issues of collateral, but banks such as CBZ Bank and Agribank have given unwavering support to farmers.

Against this background, the minister said Government was busy looking at three proposals submitted by different groups on how farmers who fail to repay loans can be assisted.

He said that the issue of 99-year leases is still work in progress.
“We have about three proposals from different groups and we have given them to our legal department to have a look at,” the minister said.
Meanwhile, farmers who struggle for funds each year, have to wait for a indefinite period before they know whether they will ever be able to use their land titles for purposes of obtaining loans from local banks.

Agriculture, which requires about $2 billion annually, accounts for about 16 percent of the country’s gross domestic product.
Productivity and recovery of agriculture from the ravages of a decade-long economic instability, continues to suffer from shortage of funding in an illiquid economy.

However, giving oral evidence to a Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment, Bankers Association of Zimbabwe president Mr George Guvamatanga said banks want a special purpose vehicle that would repay loans in the event that farmers defaulted on loans than for banks to sell their land.

He said this was critical to ensure that they avoid reversal of the land reform programme that saw thousands of once marginalised indigenous people accessing productive land.

Mr Guvamatanga said such a facility would have checks and balances to ensure that farmers do not wantonly abuse it in the knowledge someone would pay off their liabilities.