eBusiness Weekly
Oliver Kazunga
Horticulture contributes 6.5 percent to total agricultural output and 0.7 percent of Zimbabwe’s total gross domestic product. Zimbabwean horticulture currently earns US$77 million in export revenues and at its peak, the industry recorded exports above US$130 million annually, according to official records.
It is against this backdrop that Government on Thursday launched a US$30 million Horticulture Export Revolving Fund (HERF) aimed at improving this lucrative sector’s contribution to the country’s exports and Gross Domestic Product.
The fund is supported through the Special Drawing Rights (SDRs) sources the country received from the International Monetary Fund (IMF) last year.
Last year, the IMF allocated Zimbabwe US$958 million as part of a General Allocation of US$650 billion that was released globally to all of the multilateral institution’s member countries.
Officially launching the US$30 million facility at his offices in Harare yesterday, Finance and Economic Development Minister Professor Mthuli Ncube, said the HERF has the potential to close the funding gap and spearhead increased productivity, as well as finance bankable projects with a focus on the value addition.
He said through resources such as SDRs Treasury is targeting strategic sectors such as horticulture expansion and value addition, a sector that has potential to generate foreign currency earnings and create jobs that will have a multiplier effect in growing the economy.
“We are gathered here to launch the US$30 million Horticulture Export Revolving Fund.
“The Horticulture Export Revolving Fund has the potential to close the funding gap and spearhead increased productivity, as well as finance bankable projects with a focus on the value addition.
“Such strategic deployment of resources will ensure that Zimbabwe’s Vision 2030 remains on course as we target an upper middle-income society by 2030 and enables Zimbabwe to restore its position as one of the leading horticultural exporting countries in the region,” said Mthuli.
The US$30 million facility will be accessed through the normal banking channels where eligible export horticulture applicants/intended beneficiaries are required to submit their requests to the participating banks with the requisite information.
He said through the risk sharing and co-financing model, banking institutions shall conduct their normal credit assessments and due diligence.
“To this end the Government of Zimbabwe, Reserve Bank of Zimbabwe, FBC Bank, NMB Bank, CABS Bank and the AFC Land and Development Bank have signed the Memorandum of Agreement and Term Sheet for the Horticulture Export Revolving Fund.
“I want to express my profound appreciation and gratitude to those banks that have signed up to participate in the Horticulture Export Revolving Fund.
“If there are any other banks that wish to participate in the Fund, they are most welcome,” said Mthuli, adding that as the facility was a revolving fund, the Government expects beneficiaries to repay the loans made available to them so that other farmers may also benefit.
He said the Government and the participating banks will closely work together to ensure viability and sustainability of the fund through efficient allocation and recovery programmes.
In the formulation of the National Development Strategy 1 (NDS 1), which covers the period 2021 to 2025, the Government committed to not only grow the agriculture sector as a major driver of economic growth, but to increase the value of agricultural production through value addition and beneficiation.
“The main objective is to transform Zimbabwe’s economic structure from one highly dependent on the export of agricultural raw materials, to an economy trading in high value processed goods.
“Zimbabwe has been one of Africa’s traditional major exporters of horticultural products, alongside Kenya and Ethiopia for most of the late 1980s up to the early 2000s,” said Prof Ncube.
According to the Horticultural Development Council of Zimbabwe, the country’s horticultural exports increased from only US$6 million in the 1987/88 season to US$103 million by 1997.
The exports grew by an annual average rate of 25 percent for the period 1998 to 2004
peaking at above US$250 million by the early 2000s.
Until the late 1990’s the sector contributed 3,5 to 4,5 percent of the national Gross Domestic Product (GDP) 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.
The sector used to contribute over US$125 million in export earnings at its peak in 2000.
“Currently, the industry contributes US$77 million to export revenue. “According to the Horticulture Development Council (HDC), the sector employs 18 700 people and has potential to double jobs in the next four years to 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 Horticulture Export Revolving Fund (HERF) in line with the 2022 National Budget Statement on the SDR allocation, will go a long way in empowering our farmers to start horticulture projects as, well as acquire value addition facilities that will enable dehydrating, freezing, canning, bottling, extracting, juicing and concentrating their produce,” said Mthuli.
Through SDRs resources, it was from these resources that the Treasury was targeting strategic sectors such as horticulture expansion and value addition, a sector that has potential to generate foreign currency earnings and create jobs that will have a multiplier effect in growing the economy.
As announced in the 2022 national budget statement, Mthuli said the SDR disbursements of US$145 million will be channelled towards the following priority sectors: investments in social sectors (Health-NMS (US$35 million and Education (US$10 million); agriculture support (export revolving fund for agriculture (US$30 million)- cash guarantee to banks) and small holder farmer irrigation schemes (US$20 million); industry support- (retooling/revolving fund for new equipment and replacement for the value chains -cash guarantee to banks; and infrastructure development -housing development (US$10 million) and gold centres (US$10 million).
Speaking at the same occasion, Lands, Agriculture, Fisheries, Water and Rural Development Dr Anxious Masuka said his ministry was pleased the Ministry of Finance and Economic Development has availed the US$30 million HERF saying the facility will go a long way in resuscitating the horticulture industry.
“As you know under the Agriculture and Food Systems Strategy, we have five anchor strategies among which the Horticulture Rehabilitation and Development Plan is key.
“Horticulture is always considered a long-hanging fruit in terms of entry by the smallholder sector; we have two aspects of horticulture recovery, the first is the conventional horticulture where we used to export the vegetables, deciduous fruits and a lot more including flowers.
“And there is also an interest in the emerging rural development component under the
Presidential Rural Horticulture Scheme,” he said.
