Zim deploys IMF windfall to horticulture

Horticulture Export Revolving Fund launch

GOVERNMENT yesterday launched a US$30 million horticulture facility to boost exports.

The Horticulture Export Revolving Fund (HERF) will be funded through a US$1 billion special drawing rights (SDRs) facility released by the International Monetary Fund last year.

The facility was part of a US$650 billion injection released to the world to help economies recover from the effects of COVID-19 lockdowns.

“The sector used to contribute over US$125 million in export earnings at its peak in 2000,” Finance minister Mthuli Ncube said as he unveiled the facility in Harare.

“Currently, the industry contributes US$77 million to export revenue. According to the Horticulture Development Council of Zimbabwe (HDCZ), the sector employs 18 700 people and has potential to double the jobs in the next four years — 2022-2025. Furthermore, the sector is projected, under the horticulture recovery and growth plan, to contribute export earnings of US$300 million per year, by 2030. To this end, the setting up of a US$30 million HERF in line with the 2022 national budget statement on the SDR allocation, will go a long way in empowering our farmers to start horticultural projects as, well as acquire value-addition facilities that will enable dehydrating, freezing, canning, bottling, extracting, juicing and concentrating their produce,” the minister added.

Ncube said government, the Reserve Bank of Zimbabwe, FBC Bank, NMB Bank, CABS Bank and AFC Land and Development Bank signed a memorandum of agreement and term sheets for the fund.

“The banks are urged to urgently start processing the applications from players who want to access the fund,” Ncube said.

He said the tenure of the loans would depend on what the farmer was borrowing for.

Repayments would be expected within three years for long-term capital.

He said if a farmer was borrowing for working capital, repayment would be expected within a year.

“So, it (loan tenure) will vary in terms of what the loan is being requested for and banks have their own relationships with some of these customers with a working modality,” Ncube said.

FBC Bank group chief executive John Mushayavanhu said Treasury would provide 80% cash cover to banks in the event of defaults.

According to the HDCZ, the country’s horticultural exports increased from US$6 million in 1988 to US$103 million in 1997.

It says exports grew by an average rate of 25% from 1998 to 2004, before peaking above US$250 million.

“Until the late 1990s, the sector contributed 3,5 to 4,5% of the national GDP [gross domestic product] and was a major foreign exchange earner for the country with diverse exports of horticultural products including tropical, citrus and deciduous fruits; various vegetables; tree nuts; avocados and cut flowers to European markets,” Ncube said.

Lands, Agriculture, Fisheries, Water and Rural Resettlement minister Anxious Masuka said: “We used to have freight air in those days where we would ship flowers and they would arrive in the morning (overseas). We are currently working with the Netherlands to develop standards for horticulture. We are working through ZimTrade and the HDCZ so that we can reopen markets in Europe. It is something that is already happening especially for flowers and vegetables.”


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