Agribank to raise $40m for agric

07 Jul, 2019 - 00:07 0 Views
Agribank to raise $40m for agric

The Sunday Mail

Golden Sibanda
Senior Business Reporter

The Agricultural Development Bank (Agribank) has started canvassing support from investors as it prepares to raise ZWL$40 million through Agro-bills to support farmers in the 2019-2020 farming season, chief executive Sam Malaba said.

Mr Malaba said the State-owned agricultural development and finance institution raised a similar amount of funding, in conjunction with FBC Bank, for support to farmers last season.

This year’s support is over and above other funding schemes it is already administering, which include US$102 million farm mechanisation programme and ZWL$6 million livestock facility it is running on behalf of Government.

Mr Malaba said the ZWL$40 million the bank intends to raise to support agriculture in the 2018-2019 farming season was double the amount that the financial institution had raised during the previous season to support farmers.

“The bank has commenced canvassing and preparations for the issuance of ZWL$40 million for the agricultural season 2019/2020. The repayment of the ZWL$40 million for 2018/2019 agricultural season agrobills commenced in June 2019 and every year, the bank has paid all agrobills on maturity,” Mr Malaba said.

The Agribank CEO said agriculture, as one of the key sectors, remained the bedrock of Zimbabwe’s economy, with over 70 percent of the population directly or indirectly dependent on the sector. As such, he said recovery of the agriculture sector and its growth were, therefore, a pre-requisite for sustaining overall growth of the domestic economy.

Presently, agricultural recovery is constrained by a serious deficit of farm machinery and implements and lack of capital.

Against this background, the bank has been selected by the Government to manage several agriculture support facilities, on behalf of the shareholder (Government), which was a demonstration of confidence shown by the shareholder on the strength of transparency and accountability the bank had exhibited.

Agribank was nominated to manage the US$51m Belarus Farm Mechanisation Facility, which has equipment that comprises tractors, combine harvesters, low bed trucks and farm implements including planters Government also selected the bank to administer the US$50 million John Deere facility to be utilised for acquisition of tractors, planters and combine harvesters.

The bank is also taking over the US$10,2 million phase two of the Pedstock Facility, which is targeting to bring in 80 centre pivots, 80 kilometres of irrigation pipes, 80 pumps, 80 generators and related accessories to put 2 900 hectares under irrigation.

The capacitation of farmers under this facility is envisaged to lead to improved production and higher productivity, which will enhance Zimbabwe’s food security.

Further, Mr Malaba said Agribank was also currently disbursing a US$6 million livestock facility. The facility is targeting all farmers, including small holder farmers and a cross section of livestock farming projects across the entire country.

“The bank continues to work closely with Government to acquire lines of credit to support short-term, medium term and long term funding for agriculture,” Mr Malaba said.

Going forward, Mr Malaba said the agricultural finance bank was targeting tier 1 capitalisation of ZWD$100 million by January 2020, as a milestone for the bank to offer the full range of banking and financial services, including bancassurance, mortgage business and lease financing, among others.

This will be achieved through both Shareholder capital injection as well as organic growth, through profit retention.

Agriculture is the backbone of Zimbabwe’s economy contributing immensely to the country’s Gross Domestic Product (GDP), 12-16 percent, and is also one of the major foreign currency earners after the mining sector.

For instance, raw tobacco alone brings Zimbabwe nearly a billion United States dollars annually while the sector as a whole provides thousands of jobs to the populace and produces 60 percent of raw materials needed by manufacturers.

Share This: