Sahwira Agriculture, a company that is chaired by businessman Philip Mataranyika, is in the market to raise US$20 million amid plans to expand its commercial agriculture operations.
The capital raise initiative is among a 2021 list of projects that have been approved for prescribed asset status.
Prescribed assets are the percentage of pension and insurance funds (and possibly of other institutional investors) that, by law, have to be allocated to certain Government-approved instruments. Prescription of assets is a regulatory move by Government to facilitate investment into the projects by insurance companies and pension funds.
Sahwira Agriculture (Sahwira), is a corporate vehicle set up by the Nyaradzo Group to invest in large-scale
commercial crop production with emphasis on the staple cereals maize and wheat.
The Zimbabwe domiciled Special Purpose Company is focused on commercial crop production and plans to use the US$20 million for capital expenditure and working capital financing for crop production.
According to sources who requested anonymity, Sahwira aims to occupy an important position in the food production matrix of Zimbabwe and the region.
“The company is currently operating farms with a combined hectarage of 2 000, but is planning to add more farms to achieve scale of economies.
“The business model is biased towards high value production of export crops,” the source said.
The agriculture sector is seen as lucrative, but with limited investment. However, the last couple of years have seen significant amounts being channelled towards the sector.
According to the Reserve Bank of
Zimbabwe’s report for the month of February, credit to the private sector
was mainly extended towards agriculture, 31,36 percent with lending to individuals following at a distant 13,91 percent.
Reviving the sector is key to the country’s economic growth and development as the industry is currently contributing just 10 percent of the formal Gross Domestic Product (GDP) in Zimbabwe.
It contributes over 40 percent of recorded national exports, 60 percent of raw materials to agro-industries and provides employment and income to over 60 percent of the population (FAO, 2020).
The Nyaradzo Group’s venture into agriculture comes in a year it is celebrating its 20th anniversary.
Since its establishment in 2001 as a Nyaradzo Funeral Services, the Group has since incorporated several other units under its ambit including Nyaradzo Life Assurance Company, Calundike Exports, Eureka Insurance Brokers, Sahwira Events and Lifestyle, Sahwira Bureau De Change and Nyaradzo Asset Management and now Sahwira Agriculture.
Nyaradzo has extended its presence into the region and beyond through service centres in South Africa and the United Kingdom.