Urgent action needs to be taken to extricate Zimbabwe’s farmers from their woes.
There is no doubt that the agriculture sector, which the government has identified as one of the key sectors, alongside mining and tourism, can anchor economic recovery.
According to official data obtained from the Ministry of Finance and Economic Development, the agriculture sector contributes more than 10% of gross domestic product (GDP) and provides livelihood for more than 70% of Zimbabwe’s population.
However, as we head towards the 2022/23 cropping season, farmers are battling severe headwinds including the lack of funding with most of them lacking security for banks to lend them cash.
On the one hand the central bank insists it will tighten its monetary stance, meaning the cash crunch will worsen going into the 2022/23 cropping season.
On the other hand, for their failure to adequately lend to farmers, the banks have placed the blame on the door steps of the central bank.
And they have since appealed for the relaxation of the central bank’s tight monetary policy stance.
The lenders have already indicated that it will be difficult for them to fund the critical agriculture sector owing to the prolonged liquidity problem. Consequently, the central bank, bank executives and top officials from the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development have for the past few days been locked in a series of crisis meetings in search for a lasting solution to disentangle the farmers from their calamities. There is no doubt that failure to quickly find a lasting solution to the crisis will adversely affect the upcoming summer cropping season.
Mehluli Mpofu, the Bankers Association of Zimbabwe president summed it up: “The 2022/2023 summer cropping season has already kicked off with irrigated crops already planted and with this liquidity squeeze in the market, the desired agriculture growth will be difficult to achieve.
“As an agro-based economy, agriculture performance is key to economic growth hence if the sector doesn’t perform well, this will affect next year’s economic projections.” There are projections of good rains this year and such opportunity will be missed if the financing issue has not been addressed. And time is not on government’s side as the 2022/2023 season draws near.
