LIVINGSTONE MARUFU
Zimbabwe’s premier agriculture finance institution, Agribank, needs $200m worth of capital to expand its operations and to support the country’s agricultural activities. In 2017, the government transferred all its agricultural activities to Agribank to improve the sector, which contributes around 20% of GDP.
With the government empowering Agribank to do all the farming financing, the agricultural sector is expected to provide over 60% of raw materials to the manufacturing sector and significantly reduce the country’s import bill.
Joseph Mverecha, Agribank’s director for strategy, marketing and business development told Business Times that the bank required more funds to develop the agricultural sector into a more profitable business.
“Agribank requires a total of $200m worth of capital to improve the country’s agricultural sector, productivity on farms, and provide the manufacturing sector with raw materials,” Mverecha said. “Given the rapid climate change in Africa and the world over, rain-fed agriculture is no longer sustainable and can’t be depended upon, therefore there is the need to invest much in irrigation infrastructure to cushion the country against El Ninoinduced drought,” Mverecha added.
“The country’s agricultural sector is not performing as it should due to the fact that most farms are not fully mechanised. Farms need more tractors, disc harrows, ridgers, trucks and centre pivots among other advanced equipment to make farming much easier and more efficient.”
He said small-scale farmers and A1 farmers should be part of the mechanisation programme as they “significantly” contribute to the country’s agricultural output.
Since transferring most agricultural activities to the Agribank, the government has lessened the burden on the Reserve Bank of Zimbabwe (RBZ). However, various government to government programmes are still carried out by the RBZ, a situation which the Agribank says has to change.
“We need the government to allow us to handle deals like the Belarus equipment transaction as we have the knowledge of areas that need urgent attention in terms of equipment. We hope in the near future we will be the sole operators of all agricultural activities in the country,” Mverecha said. Meanwhile, the world’s largest tractor manufacturer, Mahindra, has started bringing some of the 3 000 tractors contracted by Zimbabwe to empower small-scale farmers and mechanise their operations for increased productivity. Small-scale farmers were left behind by the mechanisation programme carried out in 2004 by the then RBZ governor, Gideon Gono.
Mahindra, together with Agria, has so far brought around 100 tractors into the country. Zimbabwe’s tractor requirement is around 30 000 units but the country is not even at one-third of that requirement.
Mahindra has an assemblage of tractors ranging from 15 horse-power to 105 horse-power, with 15 horse-power tractors going for $8 000 and 90 horse-power selling at about $32 000.
In August 2018, Mahindra opened a tractor plant in South Africa, and their next plant will be in Zimbabwe, depending on the readiness of their local partners, Willowvale Motor Industries.
