US$37m loan boost for Zimbabwe agriculture sector

GOVERNMENT has secured a US$37 million loan from the International Fund for Agricultural Development (Ifad), which is meant to enhance agriculture production and productivity.

The initiative by Ifad is focused on driving rural investment and empowering communities to increase food security, enhance nutrition at the family level and boost incomes.

Speaking in the Senate on Friday, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, said that the loan would support the horticultural sector and the implementation of horticulture enterprise enhancement.

“We call it the horticulture enterprise enhancement project (Heep) as it seeks to increase agriculture production and productivity, especially by horticulture farmers, which enhances food and nutrition security, income and increases opportunities for value-addition and the development of agro-business value chains,” he said.

“As the government of Zimbabwe, we have secured a loan of US$37 140 000 from the International Fund for Agricultural Development to enhance agriculture production and productivity,” said Prof Ncube.

“The project is being co-financed by the Organisation of Petroleum Exporting Countries (Opec) Fund for International Development. The objective is to support, increase sustainable horticulture production and sales by smallholder farmers and micro, small and medium enterprises engaged in horticulture value chains.”

The minister said the project would benefit all smallholder farmers who will be organising and calling agricultural producer groups in village horticulture gardens.

“Here, we mean public, private and people partnerships. There are two aspects of support within this loan arrangement, the project would be located in four provinces, which are Matabeleland South, Masvingo, Midlands and Manicaland for the village horticultural gardens only,” he explained.

“For the four provinces’ programme, the project will be located in well-functioning irrigation schemes throughout the 10 provinces of the country.”

Prof Ncube said Ifad has already financed a project called the Small Agriculture Cluster Project (SACP), which was implemented in five other provinces, Mashonaland Central, Mash East, Mash West, Midlands and Matabeleland North.

“So, the 2021 programme and this 2024 programme, together cover the entirety of our provinces. Therefore, no province is left behind at the risk of repeating the size of the loan of $37,1 million,” said Prof Ncube.

“It’s interest-free and in the first 10 years, we don’t service anything, but from year 11, we start paying part of the interest at a rate of 4,5 percent per annum.”

According to Prof Ncube, the programme runs up to year 30, then from year 31 to year 40, the payment of the interest drops from 4,5 percent to one percent.

“So, the entirety of the tenure of the loan is 40 years, of which then the first 10 years is a grace period of no payment at all,” he said.

Prof Ncube said the loan payment will be from budget appropriations in the usual way and hoped the country will derive enormous benefits from the facility through employment creation for local communities, capacity building, climate-smart agriculture and easy market access for their communities.

“Other benefits include improved food, nutrition and security for our communities, increased household incomes and improved resilience to climate change effects and economic shocks and, finally, it just increases production and productivity, especially in the horticulture sector,” said Prof Ncube. —chronicle