ZIMBABWE – The Horticultural Development Council (HDC) has called on the government to ease access to the USD30 million Horticulture Export Revolving Fund (HERF).
The HERF, launched in September 2022, aims at enabling local farmers to boost production and tackling challenges related to unavailability and lack of access to appropriately structured financing for short to long-term expenditures.
The fund will also close the funding gap in the value addition and beneficiation of fresh produce, which has resulted in horticultural value-chain margins being unsustainably squeezed.
However, according to HDC, with 14 months into operation only USD 500 000 has been disbursed to date accounting for only 2% of the total amount.
At the recently held second edition of the horticulture investment forum in Harare, Strategic Planning and Business Development chief director Mr. Clemence Bwenjnbe challenged the slow disbursement of the fund.
“The Ministry of Lands, Agriculture, Fisheries, Water and Rural Development facilitated the establishment of a USD 30 million HERF a as a de-risking mechanism for private funding of the horticulture subspace,” Mr. Bwenje outlined.
The fund targeted horticulture production for export and is being administered by six banks (NMB, AFC, Ecobank, CBZ, CABS).
“The facility provides loans with a maximum repayment duration of 36 months. USD 19,5 million has been supported, but only half a million has been disbursed,” he said.
Mr. Bwenje said among the challenges militating against speedy disbursement are that the qualification process is strenuous, and the loan structure and targeting is not supporting inclusive growth where disenfranchised segments of the farming societies are onboarded.
Additionally, the requirement for audited financials was a hindrance to many farmers resulting in their disqualification, he continued.
HDC chief executive Mrs. Linda Nielsen said access requirements for the HERF exclude beneficiaries that the fund was meant for.
A key qualification is bankable security, which many farmers do not have. Applicants are also required to have audited financials, which adds to costs, while the processing period is also too.
“The government needs to ease the access benchmarks to make them more inclusive,” the HDC boss said. “HDC stands ready to dialogue with banks and the Government on appropriate mechanisms for funding the sector.”
The fund attracts annual interest rates ranging from eight to eleven percent per annum if working capital and between nine to twelve percent per annum if it is capital expenditure.
HERF was for all horticultural crops that are exported like cherry peppers, peas, avocados, citrus, blue berries, strawberries, and macadamia nuts. However, other key stakeholders like providers of logistics and markets can also benefit.
Meanwhile, Zimbabwe’s horticultural sector, ravaged by violent land seizures 20 years ago, is recovering thanks to increased investment and is targeting USD 1 billion in exports by 2030.
Zimbabwe’s HDC, says the nation earns USD 120 million annually from exports of horticultural products including citrus, flowers, tea, avocados, blueberries, and macadamia nuts.
Speaking during a horticultural conference held in the nation’s capital, Harare, HDC’s Vice President Linda Nielsen said the sector in Zimbabwe will “have to grow 10 times” to reach the target of $1 billion in exports by 2030.
“Obviously it calls for rapid expansion in the sector,” Nielsen said.
The targeted growth would require USD 1.2 billion of investment, according to the HDC, an uphill task for a sector struggling with an inconsistent policy and regulatory environment, high borrowing costs, logistics challenges and persistent concerns over land tenure.
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