Golden Sibanda Senior Business Reporter—
CBZ Bank Limited has secured a US$100 million medium term line of credit from the African Export and Import Bank to support agriculture and related infrastructure projects in the sector for the 2013/4 farming season.The funding, which augments resources Government is mobilising to support farmers, is a vote of confidence in the new Zanu-PF Government and comes as a relief to farmers who were neglected by the inclusive Government.
In its winning election manifesto, Zanu-PF identifies agriculture as a key driver of the economic turnaround programme and pledges to mobilise up to US$8 billion to finance the sector over the next five years.
Speaking on arrival from the Afreximbank headquarters in Cairo, Egypt, on Tuesday, CBZ Holdings group chief executive Dr John Mangudya said the funds will also improve the economy, which has been facing liquidity challenges over the past seven months.
“We have secured a US$100 million medium-term loan from Afreximbank for agriculture.
“The funds will be extended to farmers over one year. This will also improve liquidity in the economy,” he said.
Zimbabwe continues to battle liquidity constraints owing to the impact of the West’s illegal economic sanctions which restricted foreign currency inflows and access to external lines of credit.
Dr Mangudya could not be drawn into revealing the cost of the funds to farmers, but said loans to farmers would be at affordable interest rates.
“The funding from Afreximbank comes on the back of 2012 Agricultural Marketing Authority Bills whose tenure lapsed in August and the amount tendered was repaid in full.”
In a further show of commitment in supporting agriculture, CBZ Bank last week floated another US$35 million AMA Bills to support the production of soya beans.
In the recent past, the bank has been most active in mobilising lines of credit from regional banks and has to date drawn down a cumulative US$645 million from Afreximbank since 1998.
The bank’s efforts complement the Government efforts to mobilise resources for the 2013/4 farming season in support of resettled commercial, small-scale and A1 farmers.
Finance Minister Patrick Chinamasa last week said while it was not yet clear how much Government will have to mobilise for this season, it would certainly ensure farmers are assisted.
Minister Chinamasa said the basic package will include at least a bag of compound D and AN fertilisers and 10 kilogrammes of seed.
While there is enough of large grain seed, the minister said stocks of small grain seed and fertilisers might be insufficient.
The minister said while Government might not be able to mobilise all the resources required due to the short time left before the farming season starts, efforts will be made to assist farmers.
“In terms of what we want, it might not be sufficient; efforts will be made to make sure we assist small-scale farmers.
“The commitment to agriculture is there. They should not expect miracles overnight, but the commitment is there, agriculture is the mainstay of the economy.”
Minister Chinamsa said Government felt obliged to assist farmers because the cost of funding agriculture for food security was much less than that of importing to cover shortages.
In its election manifesto, Zanu-PF pledged to unlock indigenisation assets to capacitate Agribank with a US$2 billion endowment to enable it to mobilise resources amounting to US$8 billion for the agriculture sector over the next five years.
Adequate financing of agriculture, the party says, will benefit millions of people through higher incomes, food security and generation of employment in addition to stimulating economic growth through the sector’s strong backward and forward linkages with other critical sectors of the economy, among them the manufacturing and financial sectors.