By Staff Reporter
THE Zimbabwean government has approved the remodeling of Agribank into a Land Bank as part of efforts to ramp up production in the agriculture sector and diversify agricultural and rural financial services.
In a post cabinet brief, Government said it will be re-modeling Agribank to perform the functions that the Agricultural Finance Corporation used to offer to farmers in the form of short, medium and long-term loans.
“Cabinet considered and approved the proposed remodeling of Agribank (Pvt) Limited. This is in view of the fact that agriculture, among other productive sectors, is crucial in realising Vision 2030 owing to its contribution to the economy and to national security.
Cabinet noted that the establishment of vibrant and diversified rural financial services which are underwritten by a Land Bank or its equivalent will be an important step which the country should take in order to move towards upper middle income status.
This is in view of the realisation that smallholder farmers comprising Communal, Old Resettlement, Small-Scale Commercial and A1 farmers constitute 99 percent of the farming population, holding up to 95 percent of the productive land and owning over 90 percent of the national livestock herd.
Cabinet was informed that the remodeling of Agribank Pvt Limited as a dedicated Land Bank is expected to deliver a number of specific outputs. It will strengthen and diversify existing agricultural and rural financial services for sustainable agrarian reform for accelerated development”.
The Land bank will also provide investment support for A1, A2 and small scale commercial farmers (matenganyika) who have not been supported by commercial banks.
Further cabinet envisions the bank will link currently under-utilised land to structured markets and established value chains supplying factories, supermarkets and export markets and also provide working capital for the construction of agricultural infrastructure as well as for value addition and beneficiation enterprises.
The financial institution will mobilize private sector finance in order to contribute to job creation, food security and social protection in rural communities.
A Task Team comprising the Ministries of Finance and Economic Development (Chair); Lands, Agriculture, Water and Rural Resettlement; and Industry and Commerce; the Attorney-General’s Office and the Reserve Bank of Zimbabwe will be set up to look into the modalities of reconfiguring Agribank into a Land Bank.