Zimbabwe Deputy Prime Minister Strikes Out Against Foreign Banks for Refusing to Fund Agriculture

Zimbabwe Deputy Prime Minister Arthur Mutambara criticizes international bankers for refusing to finance agricultural projects inside the country. Zimbabwe initiated agricultural reforms over a decade ago to return land to Africans., a photo by Pan-African News Wire File Photos on Flickr.

Banks under fire

Tuesday, 22 May 2012 00:00
Business Reporter

DEPUTY Prime Minister Arthur Mutambara has hit out at foreign banks for refusing to fund agriculture and other productive sectors. He said it was high time the Government dealt with the issues to avert the total collapse of the sectors. DPM

Mutambara said this during a question-and-answer session in the Senate last week.
While Government had done its part in funding agriculture, the financial services sector had done very little to support its efforts.

“We should understand agriculture as a business,” he said. “The model that says Government must provide is a flawed process.

“We should find ways in which the private sector can fund agriculture. These banks — Standard Chartered, Barclays (and) MBCA — must fund agriculture.

“If they do not, we should take action. The problem we have in this country is that banks are reactionary. Maybe it is because they do not support the land reform programme. We should use sticks and carrots to find ways the financial sector can fund agriculture,” he said.
Most financial institutions are reluctant to fund agriculture and have set stringent regulations that most new farmers fail to meet.

In instances that funding is available the loans are short term and not compatible with farming.
DPM Mutambara said it was high time the Government came up with regulations to compel financial institutions to fund farming.

Last week, Finance Minister Tendai Biti said Government was working on amending the Banking Act that would compel banks to play their economic role.

“We have tried to do romance with the banks and it has produced nothing,” said Minister Biti. “We are tired of it.

“There would be drastic amendments to the Banking Act.

“We are working on a framework that will be available within the next two weeks.”

DPM Mutambara said Government had enough funds to make sure that people in areas that were affected by drought do not starve.

Most areas in the Matabeleland provinces and parts of Midlands and Manicaland were hit by drought with most people requiring food aid until the next harvest.

“No Zimbabwean should go without food and we want to do it (food distribution) in a non-partisan manner,” he said.

He said Government was working on a three-year rolling programme to prevent haphazard planning in agriculture funding that has resulted in farmers accessing inputs late.

This had affected productivity at most farms, he said.