IMF warns Zim on Command Agric

THE International Monetary Fund (IMF) has warned the government on the command agriculture programme, saying excessive public spending, if continued, could exacerbate cash scarcity, further jeopardise the financial sector and ultimately fuel inflation.

BY TARISAI MANDIZHA

IMF deputy director of strategy, policy and review, Alfred Kammer
IMF deputy director of strategy, policy and review, Alfred Kammer

Speaking at a media briefing last week, IMF deputy director of strategy, policy and review, Alfred Kammer, responded to a question on what funding model could return Zimbabwe to being the breadbasket of the region.

“In terms of the funding model that you asked about and the breadbasket concept, we focus on the fiscal implications of the agriculture programme in Zimbabwe,” he said.

“Our analysis suggests that the current design of the programme creates significant fiscal risks and overall effectiveness could be improved by ensuring that the beneficiaries are those most in need.”

Kammer said Zimbabwe would record economic growth this year due to improved rain, but warned this was not sustainable.

“The main finding regarding Zimbabwe is that growth in 2017 will be boosted by the bumper harvest due to exceptional rainfall,” he said.

“The challenge really is to sustain growth in Zimbabwe. This will require timely action to reduce the deficit to a sustainable level and reforms to attract investment.

“Excessive government spending, if continued, could exacerbate a cash scarcity, further jeopardise the external and financial sectors, and ultimately, fuel inflation in Zimbabwe.”

This came as Finance minister Patrick Chinamasa in his recent 2016 budget review and 2017 economic outlook said part of the major driver behind 2016’s budget overrun of $902,2 million was expenditure interventions in support of the recovery of agriculture.

Kammer said without adjustment reform and re-engagement, Zimbabwe would have difficulty in addressing its structural issues.

The IMF last week critiqued the country’s support programmes for agriculture, calling for a cost-effective and well-targeted approach.

During consultations between the IMF and Zimbabwean authorities, the international body questioned the design and financing of the command agriculture programme, as the commitment to buy large quantities of grain at above-market prices is not cost-efficient.

26 Comments

  1. That is why Jonso called it evil command agriculture , that prof is too good , only that he is on the wrong position of his carrier .

  2. According to theory high government spending leads to inflation. If demand is low because of unavailability of currency this will counter some of the effects of inflation (unless Zim dollar returns of course). To keep public servants paid + in order to raise money for this government will end up exporting surplus grain at obviously less than it cost them to produce. Then drought years will hit again when we have nothing in reserve…long and short of it, the gains of command agriculture are just a mirage.

  3. these IMF guys always give a thump up when they are the ones funding the programs. here vise President did a good job. what is now needed is to perfect it and be transparent. locally funded projects are better than outside control and too much interest

    1. Good friend, it defies logic to buy grain at above market determined price because it breeds corruption….What will stop the so-called bigwigs from importing at lower prices and cashing in on the difference in prices which is exactly what is happening….Those Goons are corrupt beyond the word corruption!

    2. I agree BUT IF the spending is directed towards production, the out come maybe different because of the multiplier effect, however this effect is not felt because the borrowers do not repay, the lending process is highly inefficient… the borrowers do not grow the crop in question and where they do some will fail…. in the end the money is not repaid… even when the farmer has harvested a bumper crop. The solution is for the state to provide low interest loans to banks and let the banks carry out the lending to deserving and qualifying farmers. The other missing link is beneficiation… process the harvest further into products that are worth more than the primary crop… that way your agro processors (agrifoods, national foods, blue ribbons, olivine, united refineries etc) maximise their production potential create employment and finished products that can be sold locally or exported. That way more people are employed because of increased production by the processors… thereby increasing disposable income that could be possibly spent in the economy…increases the availability of local goods on the market and possibly reduce imports … that way free forex for production related imports… and could possibly earn forex when the finished goods are exported…. could possibly result in GDP growth….But this is my thinking and I am not seeking to buy someones vote by giving them free farming inputs neither am I seeking personal gain or that of my family, hangers on, party supporters, small houses etc

  4. have food in your silos and control distribution better than having money of any kind in bank and being controlled by imf and its masters. above all God gives his rains without looking at skin color . godo re imf dai vari ivo vakapa mari yechikwereti che command maifa nacho chikwembi chacho.imf want to see people kunyanya vatema vakabata zvindiro vachipemha chete

  5. Wake up people free yourselves from the shackles of imf Proverbs 22: 7. Without money from poor nations imf will die.

  6. its not abt havng grains and food its at what cost, remember Maguta ,bacossi,

  7. True there is lack of clarity on the part of the imf’s approaches to zimbabwean situation!-what are they actually saying? They must clarify clearly how this would play out

  8. now its clear, these imf guys always give a thumbs up if they are funding.
    The governmnt invests in agriculture, governmnt further boosts agriculture by buying back from from the farmers. i dont see what is bad about that..its just a question of accountability and transparency.

  9. Zimbabwe, our land is our prosperity. Pamberi necommand agriculture. To hell with these IMF guys.

    1. I agree until you need top start begging again. We will see how clever you are when the next drought comes.

  10. Todiiko kuti zvinake

  11. For bumper crops you need expert farmers.

  12. kadyamatura mindatakatora

    TO HELL WITH THE INTERNATIONAL MONETARY FRAUD

  13. tendai chaminuka

    Saka its better to import maize than to produce on our own.These IMF guys have doctorates and PHD’s and their thinking is in line with our loud doctors and professors.By producing our own we create employment and that’s bad.Veduwee

  14. mgobhozi wezintabeni

    Ignore this advice,the country would plunge further into economic turmoil.This is a delinquent regime that ignored the Imf which the authorities invited when the inevitable economic collapse was imminent.One ignores the doctor’s medical prescription and advice at his/her own peril.

  15. To hell with IMF. What cash shortages do they foresee when the gvt is spending the money on farmers(communal&commercial) who in turn will spend the money locally?If we were importing the grain then thats what would cause cash shortages.Now that we’re food sufficient without their input they feel threatened.They enjoy when each time they see us with a begging bowl in hand.We will spend our bond notes on locally produced food and they wont see us begging again.We will need forex for fuel and medicines yes but not for food.ViVa Command Agriculture.

  16. itawo doctor we economy wenyika yako madoctor e ESAP , dzidzawo . drought or extrem weather conditions caused byclimate change caused by big economies of the world are affecting everyone what will imf do to climate change

  17. apa yabatwa imf

  18. forward with command agricultre. imf always critise zimbabwe government programmes . no surprise is thier regime change mantra.

  19. Zim is the poorest country in the orld

  20. NOMUSA GARIKAI

    Well puff goes Mnangagwa’s command agriculture lie as the panacea to get Zimbabwe out of the mess the country landed itself in after the white-owned farm seizures! It will not work.

    We should not have to concern ourselves with whether a given Zanu PF policy will work or not if we had free and fair elections because the people of Zimbabwe are sick and tired of the regime they will vote them out of office at the first opportunity. After they have rigged the elections to stay in power the regime is notorious for ignoring all the sound advice it is given hence the reason the country is in a mess.

    As a nation, we should just focus on demanding democratic reforms implemented because until we have reforms, nothing of substance will ever be accomplished!

  21. zviroto zviroto, voting out zanu pf, better support all their programmes, viva Ngwena

  22. The Zimdollar is back! The electronic bond dollar is the new Zimdollar. With no backing it is just a number with no real value on a computer screen.

  23. Democracy does not equal development.

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