99-year leases now bankable, transferable

99-year leases now bankable, transferable

99-year leases now bankable, transferable

Source: 99-year leases now bankable, transferable | Herald (Top Stories)

 Dr John Mangudya

Dr John Mangudya

Africa Moyo Business Reporter
Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya yesterday said bankers have agreed to accept 99-year leases as collateral after Government tweaked them to be transferable and bankable.

The acceptance of 99-year leases by banks represents a landmark development that is bound to transform the agriculture sector. Banks have previously been rejecting the leases, arguing that they were not transferable, in the event that a farmer borrowed money and failed to repay.

But after marathon meetings involving Government, bankers and RBZ, it has been resolved that the 99-year leases are now bankable. Another meeting was held yesterday between Dr Mangudya and bankers, which it was agreed that farmers can now obtain loans on the strength of 99-year leases.

In his 2018 Monetary Policy Statement presented in Harare yesterday, Dr Mangudya said bankers were now happy with the 99-year leases and were ready to lend to farmers who use them as collateral.

“In line with the current economic dispensation’s aspiration to transform agriculture into viable business proposition and taking into account the significant improvements made by Government on the 99-year leases to enhance the security of tenure of the lease and making it bankable and transferable, the Bank has agreed with banking institutions for them to accept the 99-year leases as security for accessing credit from financial institutions in line with the provisions of the leases,” said Dr Mangudya.

Quizzed to explain the major changes between the current form of 99-year lease and the previous one, Dr Mangudya said it now gives bankers the comfort of lending because should Government decide to repossess a piece of land whose owner had obtained a loan from banks, compensation would first be paid to the financial institution.

“The issue is that the Government has improved the 99-year lease document; it now has a transferability element, now has a bankable element. Before the changes were done to these 99-year leases, there was no provision in the old document about financiers (but) it now provides the financier with the comfort of lending.

“It also says that in the unlikely event of Government taking someone’s farm, and that person had been given a loan at the bank, the first port of call for compensating goes to the financier. So we are quite happy as banks,” said Dr Mangudya.

He added that bankers were only concerned about “confidence” and whether or not a proposal is bankable, before extending loans. In other countries such as Ethiopia and Mozambique, farmers don’t own the land permanently, but on lease agreements, yet they access funding from banks because of policy predictability.

As part of ensuring policy stability and reassure bankers that farmers would be on their pieces of land for long, Government has extended security of tenure, even to the remaining white commercial farmers. The provision of 99-year leases to white commercial farmers is a major policy shift from the previous arrangement where they could only get five-year leases.

Dr Mangudya said the bankability of 99-year leases was part of measures being adopted to turn around the economy. The acceptance of 99-year leases by Government is part of measures by the new administration led by President Emmerson Mnangagwa to stimulate agriculture production.

In his inauguration speech on November 24 last year, President Mnangagwa said he would anchor his economic turnaround efforts on agriculture and attracting foreign direct investment.

Other measures being implemented by the RBZ to revive the economy include increasing production, exports, foreign direct investment, diaspora remittances, loans and putting in place measures to protect investors’ funds.

COMMENTS

WORDPRESS: 9
  • comment-avatar
    Ndebele 6 months ago

    Brilliant Zanu propaganda Mr. Moyo. Please head off to Prof Scoones for at least 10 farms. You are a genius.

  • comment-avatar

    Ok maybe I’m being naive, I have always been a ‘glass half full’ person. And yes it may be ‘same bus different driver’ scenario.
    But all the tweaks that we are witnessing are leading us towards a functioning country.
    I’m excited.

    • comment-avatar
      The Mind Boggles 6 months ago

      Until the next lot come along and say “Oh no that was a mistake , we meant to say 99 day leases”. I agree with Ndebele lets leave our revival in the hands of Prof Scoones , we all want a hut with a goat and two chickens.

    • comment-avatar
      Ndebele 6 months ago

      If you study Zanu you will find that they often make all the right noises – but it is just to get what they want. They made the right noises to Joshua Nkomo after they had murdered 20 000 of his people. They made the right noise to the MDC and the country and then set up the GNU – then what? If you have a good memory – you will recall that they made all the right noises about having the people behind them to remove Mugabe – only to now say that he is The Icon of Zimbabwe! If you support Zanu – Mugabe remains The Icon! Along with Scoones and the tribe…

  • comment-avatar

    Remember ‘title deeds’ were also bankable until mugarbage decided he’d destroy the country…….

  • comment-avatar
    spiralx 6 months ago

    Yes. it’s a good, and necessary, implementation.

    And we have to take them at their word for now (to do otherwise just continues the disaster that is present-day Zimbabwe).

    But since the new regime has arrived with zero credibility, we wait to see them prove themselves in action.

    • comment-avatar
      Ndebele 6 months ago

      Just study what this so called New Regime consists of – Ltd mandala thieves with 38 years experience in looting. Now we are told to see them in a new light with new eyes? What were ED and Shiri up to during the Matabele Genocide? They were visiting Lookout Masuku and Dumiso Dabengwa at Chikurubi Prison and telling the innocent ZAPU inmates (released by the court) to buy Zanu cards before they would be released? Then they do the exact sae with Roy Bennett (Pachedu) and beat his wife to have a miscarriage? Now we are told that these are new Zanu? ED and Chiwenga are still telling the people that Mugabe is an Icon!

  • comment-avatar
    Doris 6 months ago

    Question…..if you were a bank manager how would you feel about taking a farm as security in this day and age? How do you Roget your bucks back if the loan is not serviced? Sell the farm? Oh no, you can’t do that because it’s state land.

    I don’t believe this turn of events.

  • comment-avatar

    What about our title deeds?