A MERE 1,6% of the US$30 million Horticulture Export Revolving Fund (HERF) has been disbursed more than a year after the facility was launched.
The US$30 million HERF was meant to support horticulture farmers, a drawdown from nearly US$1 billion special drawing rights that Treasury received from the International Monetary Fund in August 2021.
But since its launch, few farmers have been able to access the funds due to stringent conditions, among other reasons.
At the time of the launch, the Reserve Bank of Zimbabwe, FBC Bank, NMB Bank, CABS and the AFC Land and Development Bank signed the memorandum of agreement and term sheet for HERF.
“The ministry facilitated the establishment of a US$30 million Horticulture Export Revolving Fund (HERF) that is going to support the horticulture development base. It is a de-risking mechanism for private funding of the horticulture subspace. It targets horticulture production for export,” the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development’s strategic planning and business development chief director Clemence Bwenje said.
He was speaking at the Annual Horticulture Investment Forum held in Harare yesterday.
“Banks that are participating are NMB, AFC, Ecobank, CBZ and CABS. The facility provides loans which are supposed to be paid within a maximum of 36 months,” Bwenje said.
He said the fund was not easy to access as US$19,5 million had been supported, with only US$500 000 having been disbursed.
- MDC-A chickens out of by-elections
- Nedbank Zim parent unveils new listing plan
- Nedbank Zim parent unveils new listing plan
- Nedbank Zim parent unveils new listing plan
Keep Reading
“Challenges to access it include the qualification process which is strenuous. The loan structure and targeting are not supporting inclusive growth whereby disenfranchised segments of the farming societies are onboarded. The facility targets formal and established entities. This is the reason why there are no individual farmers who are among the beneficiaries.”
He added: “The processing period is very long, stretching to over six months. Security is one key component defining the qualification of an applicant. Audited financials is topping as a key component defining the qualification of the applicant.”
At the time HERF was launched, FBC Holdings Limited group chief executive officer John Mushayavanhu revealed that Treasury would provide 80% cash cover to the HERF disbursing banks to allow the banks to make more timely disbursements.
The lack of funding comes when horticulture farmers are seeking to increase their hectarage from 36 600 hectares (ha) to 55 300ha by 2025, gross value to US$3,9 billion by 2025, and target an annual export value of US$1,32 billion by 2025.
“There is a potential for the horticulture sector to grow. You might be aware that as the ministry we have the Agriculture and Food System Transformation Cluster which is our blueprint for the sector and there we had targeted to achieve an US$8,2 billion of gross value production,” Bwenje said.
“We have already achieved that target and we have reviewed our target to US$13,7 billion by the end of 2025. We need to have a strategy to achieve that. In this strategy, there are four pillars which are policy, investment, research and technology, and lastly, co-ordination and collaboration.”
