Govt keeps banks guessing

LIVINGSTONE MARUFU

The government has kept banks guessing, a month after the sector submitted its requirements for the 99-year leases to be bankable.

Banks have rejected the 99-year leases as collateral, a move which has affected funding into the agriculture sector.

Last month, the Bankers Association of Zimbabwe (BAZ) submitted its proposal for the 99-year leases to be bankable.

A response is yet to come, BAZ chief executive officer Fanwell Mutogo told Business Times.

“The government is yet to make engagements  (with us) after we have told them what we need. Rather the authorities haven’t given a response and are engaging other stakeholders,” Mutogo said.

But Lands, Agriculture, Fisheries, Water and Rural Development permanent secretary John Basera said consultations were being done to come up with a product that would be accepted by all parties.

“When crafting something of such importance, the government consults everyone so that every stakeholder’s input is taken into consideration and we implement after we have all the details on the table,” Basera said.

“An announcement is expected from the Minister [Anxious Masuka] soon.”

The delays in coming with a position comes as local banks have told Parliament the financial sector will not lend to farmers using the 99-year leases as collateral as the land tenure in Zimbabwe is not guaranteed.

Banks are concerned about continued farm invasions across the country, a strong indication that the land can be taken away from farmers who are potential borrowers.

There were reports indicating that ruling party linked politicians and youths were involved in farm invasions across the country and lenders are adamant that as long as the government does not bring finality to the land reform programme, they will not accept the 99-year lease as collateral.

Bankers said if land tenure was well defined in that document, this would help in making the paper bankable.

Section 72 of the Constitution says all land belongs to the State, meaning the banks would be powerless to sell the land in the event of a default.

This has resulted in farmers struggling to access funds from banks who continue to shun 99-year leases as not bankable, thereby affecting production

In some cases, banks were believed to be only offering loans that do not exceed the forced sale value of assets listed as collateral and this strategy is protecting both the borrowers and the banks.

Pursuant to ensuring that farmers achieve maximum productivity, the Cabinet has approved the Land Commission Bill to clear out multiple farm owners, resolve land disputes and deal with land beneficiaries leasing out farms to those who are not entitled to them.