BY Cedric Madanha
CABINET has approved the establishment of a US$30M Horticulture Export Revolving Fund aimed at supporting export-oriented horticultural production companies with their foreign currency requirements.
“Cabinet considered and adopted proposals on the Establishment of the Horticulture Export Revolving Fund as presented by the Minister of Finance and Economic Development, Honourable Professor Mthuli Ncube.
“It will be recalled that Government has proposed to use part of the Special Drawing Rights (SDRs) received from the International Monetary Fund (IMF) to support the productive sectors of the economy.
In the agriculture productive sector, priority has been placed on horticulture and irrigation development. Treasury has, therefore, engaged stakeholders in the horticulture export sector on the modalities for the establishment of the Horticulture Export Revolving Fund, in line with the Horticulture Recovery and Growth Plan,” said Information and Publicity Minister Monica Nutsvangwa.
Horticulture is one of the key sub-sectors of the agricultural sector in Zimbabwe, with substantial potential of successful production across all agro-ecological regions.
Zimbabwe was among the top 3 horticulture producers in the world after the Netherlands and Equador up to 2002.
The Revolving Fund, seeks to restore Zimbabwe to its former glory. Currently, the industry contributes US$77 million to the country’s export revenue and employs about 18 700 people.
Horticulture is a major foreign currency earner and is projected to contribute US$300 million annually in export earnings by 2030.
Additionally the Horticulture Export Revolving Fund will address the major challenge of unavailability and lack of access to appropriately structured financing for short to long-term expenditures.
The Fund will also close the funding gap in the value addition and beneficiation of fresh produce, which has resulted in horticultural value-chain margins being unsustainably squeezed.
Mutsvangwa said that the facility will be accessed through the normal banking channels, with applicants or intended beneficiaries submitting their requests to participating banks with the requisite information.
Government and the participating banks will monitor and evaluate the use of resources advanced to borrowers.
Mutsvangwa added the Fund will ensure the capacitation of ZimTrade and the Agricultural Marketing Authority (AMA) to enable them to open up verifiable markets for horticultural farmers.
Another key highlight under the Fund is the establishment of value-addition facilities close to production bases in order to unlock the country’s horticultural smallholder potential.
As stipulated in the National Horticulture Recovery and Growth Plan, the Fund will be used to develop the Hub and Spoke model to create markets for surrounding communities and also bring in a number of services in rural areas.
Beyond production, the Fund also makes provisions for logistics and cold chain facilities, a move which will lower post-harvest losses and facilitate market access.