ZIMBABWE- South African commercial bank Nedbank has announced a partnership with the Horticulture Development Council to provide US$25 million in credit for farmers and exporters.
The bank revealed that its main reason for making the credit line available was to exploit the hidden value in capacity building in the agriculture sector. Nedbank reiterated the need for all stakeholders to understand and respond to the needs of the farmer as this would help in encouraging economic growth.
The bank reiterated it came up with the funding idea because it is confident in its trade finance expertise, which would benefit farmers in Southern Africa and the economy.
Ms. Latifa Kassim, Nedbank’s Head of Treasury, Marketing, and Corporate Affairs, said, “As a bank, one of the key things that came up was our ability to provide appropriate finance, which will have correct tenures and interest rates to support these farmers. We have a US$25 million line of credit, which we are getting through our major shareholder, Nedbank South Africa, and it’s to support export products.”
The bank encouraged Zimbabwean farmers to take up the credit, whose tenure is one to three years. Kassim reiterated the bank has made the terms negotiable depending on the nature of the borrowing business.
The Zimbabwean government welcomed the move, saying it will go a long way in enhancing food security and agricultural efficiency in the country, which although has significant potential, remains underexploited.
According to the International Trade Administration, Zimbabwe has 4.13 million hectares of arable land, 25% of which is cultivated. However, the sector remains one of the most important contributors to the country’s economy, directly contributing to the livelihood of 60% of the population. Agriculture also contributes 23% of formal employment and provides 63% of raw materials required in the country’s manufacturing industry, 30% of export earnings, and 15% of GDP.
The country’s agriculture sector faces inadequate extension services and farmer training, finances, and a deteriorated irrigation infrastructure caused by the fast-tracked land reform program that began in 2000.
Despite these challenges, the country’s agriculture production has significantly grown from US$5 billion in value output in 2019 to US$7.2 billion in output value in 2023.
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