Government has enlisted commercial banks and more private sector players in the administration of a new financing model for Command Agriculture, as it seeks more sustainable means of financing agriculture to boost production.
The financing scheme will be implemented under a public private partnership (PPP) arrangement with the ultimate goal of mobilising financial resources for the sector, widely regarded as the backbone of the Zimbabwean economy.
The approach is in line with the 2019 National Budget as well as the Transitional Stabilisation Programme (TSP), which envisions Zimbabwe becoming an upper middle income economy by 2030, driven by increased industrial activity.
Under the new financing model, Government will provide guarantees to banks to enable them to extend funding to farmers.
According to a statement by the Ministry of Finance and Economic Development (MoFED), three banks have partnered the Government and these are Agribank, CBZ Bank and Stanbic Bank.
“In line with the Transitional Stabilisation Programme (TSP) and the Budget Statements for 2019, the financing model for special grain and oil seed (maize, wheat and soya beans) production (Command Agriculture) has been transformed and now involves commercial banks and private sector out grower schemes, working jointly with Government on a Public Private Partnership basis.
“So far, the banks that have entered into partnership with Government include Agribank, CBZ Bank and Stanbic Bank.
“More banks are expected to join the programmes, therefore bolstering efforts for domestic resource mobilisation,” said MoFED in a statement.
The 2019 National Budget forecasts agriculture to grow by 9,4 percent in 2019, premised on strong performance of cash crops such as tobacco, cotton, sugar cane and soya beans.
Agriculture accounts for 33,1 percent of Zimbabwe’s annual export revenue, with an export output ratio of 39,4 percent.
The sector has been on an upward trajectory since 2016, and is estimated to have grown by 12,4 percent last year on the back of increased funding by Government and the private sector, through, among other initiatives, Command Agriculture and Presidential Inputs Scheme.
Command Agriculture was launched initially for maize production, but later extended to other facets of agriculture such as soya beans, wheat and livestock production.
The TSP also emphasises investment in agriculture by Government, although the programme also recognises the need for greater involvement and participation of the private sector regarding the financing, contract farming arrangements and extension services to various agricultural commodities.