Zimbabwe: Govt Restructures Command Agriculture Financing Model

The government of Zimbabwe has moved in to restructured the financing model of its Special Grain and Oil Seed program dubbed, Command Agriculture taking on board local private financiers, as it seeks to make the initiative all inclusive and much more transparent, 263Chat Business has established.

The Command Agriculture program which started in 2016 has seen the government channel over US$ 3 billion on grain production with nothing to show for it as Zimbabwe remains a net importer of grain.

In a statement, the Finance and Economic Development Ministry said it was moving towards a public-private-partnership model in financing Command Agriculture program going forward.

“In line with the Transitional Stabilization Program (TSP) and the Budget Statements for 2019, the financing model for Special Grain and Oil Seed (maize, wheat and soya beans) production (Command Agriculture) has been transformed and now involves Commercial banks and private sector out-growers schemes, working jointly with the government on a public private partnership (PPP) basis,”

“So far banks that have entered into a partnership with the government include, Agribank, CBZ Bank and Stanbic Bank. More banks are expected to join the program, therefore bolstering efforts for domestic resource mobilization,” read the statement.

The government will provide guarantees to the Banks in order for them to lend to farmers on a commercial basis.

The command agriculture program has struggled to get buy-in from local stakeholders in the past owing to excessive state control, analysts say.

Billions of dollars were splashed without Parliamentary approval in a sketchy deal between the State and oil trading firm, Sakunda who were mysteriously contracted to bankroll the project.

Terms of agreement to this deals remain unknown.

A diagnosis by the Public Accounts Committee recently unearthed shocking details where orders where given to officials at the Ministry of Finance to process payments to various shadowy entities.

Recently, Accountant General, Daniel Muchemwa conceded that the program was hurriedly done without proper laid down accounting procedures.

Analysts have however welcomed the development although they insist the government should not take a leading role.

“It’s a welcome development now that the government is opening up for private sector participation in agriculture. But the government should not take a leading part in this instead it should just provide the framework that excites banks and companies to engage with farmers on their own terms on commercial basis not with the government in the picture. Agriculture should just be totally private sector driven because we have seen in the past what happens when the state is in control,” economic analyst, Pepukai Chivore weighed in.

There are fears that government interference might frustrate private players in financing the program with lessons from the past pointing to selective identification of beneficiaries along political lines.

Source

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Author: skvaller

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