We are broke: Agribank - Zimbabwe Situation

We are broke: Agribank

via We are broke: Agribank – DailyNews Live by John Kachembere 10 FEBRUARY 2014

Agribank says it has insufficient money to fund the forthcoming winter-cropping season due to limited resources received from Treasury.

Sam Malaba, the Agribank chief executive, last week told Parliament that the agriculture-focused institution only received $4 million from a $50 million request, which was earmarked for the 2013/2014 farming season.

“We have no money at the moment and it’s a chilling position. All the funding we received from the national budget went towards summer cropping,” he said.

Malaba, however, said the financial institution will devise ways of getting the scarce resource to fund farmers.

Agribank — which was recently removed from the United States sanctions list — has been struggling to deliver its duties of lending to farmers, due to liquidity constraints in the economy.

The bank’s capital amounted to $20,43 million as at 31 December 2012, against the minimum regulatory capital requirement of $25 million.

Malaba noted that the recapitalisation of Agribank would help the troubled financial institution to get cheap credit lines from external creditors.

“If we get $50 million from government then the bank’s capitalisation will be over $70 million and then if we sell the 49 percent stake, that will be an additional $70 to the bank.

If we are capitalised to the tune of about $150 million it would make the bank attractive to international lenders,” he said.

Last year government approved the disposal of its 49 percent shareholding in the bank to strategic investors as a way of recapitalising the financial institution.

Malaba said a technical committee made up of officials from the ministries of Finance, Agriculture and Justice, Attorney General’s office, the central bank and Agribank was set up to conduct an evaluation.

“We are waiting for the Finance minister (Patrick Chinamasa) to take the papers to Cabinet for approval and then we can go to tender looking for equity partners.”

Plans to find a strategic partner for Agribank have been on the cards for a long time and analysts believe it is important for a suitor to be roped in to recapitalise “one of the country’s most crucial banks”.

Market watchers assert that Agribank badly needs an investor who will inject fresh capital as the bank seeks to regain lost ground after posting an $3,7 million loss in the half year to 2013.

Economic analyst Tapiwa Nyandoro said he doubted Agribank would get a capital injection of $50 million from Treasury, due to limited fiscal space.

“That of course means the bank can only raise $20 million from other investors, even if they would wish to invest more. This is thanks to the restrictive nature of the indigenisation law, which limits foreign investment to 49 percent of equity in our enterprises,” he said.

Nyandoro noted that government could also pledge land held by A2 farmers worth a billion dollars or so as equity as part of recapitalising the bank.

“This in turn could allow Agribank to seek as much as $2 billion in foreign direct investment diluting government’s Shareholding to around 33 percent.

“With the concurrent enactment of legislation for land titling, this would allow the bank to offer 25-year mortgages for the purchase of farms by sitting tenants or other interested parties, as well as the provision of working capital.

It is time to bring bankability and liquidity to the commercial farming sector. Allow the idle assets to sweat,” he said.

 

 

COMMENTS

WORDPRESS: 19
  • comment-avatar
    DL 4 years

    What are they smoking? No foreign investor is going to risk even a Penny of his own money to buy 49% of nothing! It’s up to ZANU-PF to get themselves out of this strange brew that they have made. Trying to apply national socialist planning in an international capitalist economic environment doesn’t work. Just ask China!

  • comment-avatar
    munzwa 4 years

    Funny, looking for someone to PAY for 49% but other companies have to GIVE away 51%. Just what world do we live in?

  • comment-avatar
    CHINDUNDUMA 4 years

    THE PUBLIC WANTS TO KNOW HOW MUCH IS GOING TOWARDS YOUR SALARIES. THIS COULD BE THE REASON WHY THE BANK IS BROKE.

  • comment-avatar
    John Thomas 4 years

    How much has the board and management lent to themselves and has any of it been repaid?

  • comment-avatar
    Mlimo 4 years

    Big salaries, then internal loans, Asking for more money -what to pay more salaries? Of course no money also means they don’t have to work so fire them all . No one is going to invest in zanupf robbery.

  • comment-avatar
    Fallenz 4 years

    Of course it’s broke… DUH..! The bank heist continues. If these crooks were white, they’d already be in the snake pit.

    By-the-way, excellent comments… great, appropriate questions that deserve answers.

    so, where are the ZANUPF apologists who will attempt to spin the story to make the thefts the fault of the West or EU? Maybe Cuba will bail them out… or perhaps Argentina… China?

  • comment-avatar
    Nzou 4 years

    Lending money in agriculture is a serious business.

    If you lend money to thieves and wanabe weekend farmers who haven’t a clue about to farming, you do end up going broke. Zanufying the lending institution doesn’t help either. I suggest to you idiots and clowns who call yourselves bankers that you go cap in hand to the bleeding hearts club in the west and convert your “bank” into an NGO to collect western aid. Don’t look east because China never do anything for nothing.

    OOPS sorry, I forgot. Zimbabwe is already a Chinese colony!

  • comment-avatar

    just close this uglybank

  • comment-avatar
    Garwe 4 years

    May be I am reading between the lines ! This bank is complaining that the treasury is not funding it? Zvakafanana nemunhu anodya tsvina yake nekuti amai havana kubika.It`s pathetic. This bank can not be funded from treasury every year.

    • comment-avatar
      gwabu 4 years

      this bank was a conduit for syphoning money to zpf cronies.

  • comment-avatar
    Jogo Bonita 4 years

    If we suddenly woke up and agribank has a billion dollars to lend to farmers, we all know who will borrow the monies without repaying so ngazvife.

  • comment-avatar
    LUCY 4 years

    Welcome to my world Agribank. I have been broke since he dinasaur came to power! Lump it like we all do

  • comment-avatar

    To be broke starts very very far Mr Charles charamba can you comment on this

  • comment-avatar
    easily fooled 4 years

    Which international lender does malaba what agribank to be attractive to? For what? Zimbabwean Farmer want money, borrowing from international financiers is not an issue of huge capitalisation, instead its about quality of loans, the government policy, bank performance and indigenisation policy

  • comment-avatar
    gwabu 4 years

    crazy $50 million for zpf cronies. eee free farming inputs ana agribank muchiti makangwara. reality they were not free it was tax payers which you were dolling out and never getting it back. was paying but like the foolish mps who think treasury brews/cooks and fries money they thought they would get it forever. you repeat what you saw.

    it was good zpf cooked the election results so reality could at last done on them. eee biti arikutinyima mari yema inputs.

    interestingly god has poured a lot of water this season so that zpf can not have the excuse of drought for failure to produce.
    agribank quickly close shop. we don’t want government to bail you out. just close shop.

  • comment-avatar
    Fallenz 4 years

    Yes, close up this ZANUPF loophole… but not without recovery of those internal loans and bogus salaries. Recovery of all stolen wealth is paramount before ZANUPF thieves retire to their stolen estates and mansions.

  • comment-avatar

    And Murimi Wanhasi remains in the fields….

    • comment-avatar

      Fallenz spot on my brother. Can you imagine if Zanu decided to get honest. The money that Cuthbert stole returned. More people would be able to access medical aid. The ZBC money from Happisson returned. New equipment for ZBC. The Harare town clerks money returned. Potholes all covered. The Marange diamonds money returned by Obert Mpofu. Marange people resettled and fully compensated. We can go on and on. The truth of the matter is what Zanu pf people have stolen if returned would be enough to kick start and maintain the economy. Obviously this can not happen. All I am showing is the level of theft these people have participated in.

      • comment-avatar
        LUCY 4 years

        All these thieves have probably invested the money outside Zimbabwe maybe in some European country. That money earns interest for another country which uses it to develop itself while giving us cramps in the form of AID and maybe weapons too to kill each other off. Hubenzi hwakadii ihoho hwekuba mumba mako uchipa umwe munhu?
        And these same thieves will be the first to go on the podiums across the country telling us patriots how much they hate the West while clad in Saville Row suits and driving cars bought from those countries. IDIOTS IS WHAT I SAY!