99-year leases now bankable | The Herald March 9, 2016
Elita Chikwati and Brenda Ziga
FARMERS can now use the 99-year leases to borrow money from the banks after Government and bankers ironed out sticking points that made banks reluctant to accept the leases as security.
The move, barring El Nino-induced drought, is expected to boost agricultural production and ensure maximum land utilisation.
In an interview yesterday after addressing the 29th Joint Staff College course students in Harare, Finance and Economic Development Minister Patrick Chinamasa said Government and bankers had cleared outstanding issues and came up with a draft tradeable document.
“We have successfully, in consultation with the Ministry of Finance and Economic Development, Ministry of Lands and Rural Resettlement, Ministry of Agriculture, Mechanisation and Irrigation Development and the Bankers’ Association of Zimbabwe (BAZ) come up with a draft that incorporates tradable features. This means that when granted the 99-year lease one can use it as a document to go and borrow money.
“The major challenge affecting agricultural production right now is lack of funding. So, to encourage commercial banks to fund agriculture, we need to come up with appropriate legal issues that make it possible,” he said.
BAZ executive director Mr Sij Biyam could not confirm the development yesterday but asked for questions in writing.
Cde Chinamasa allayed fears that farmers may lose their land after failing to pay back loans and said farmers should be willing to work hard and settle their debts.
“The issue about farmers losing their land means we will be planning to fail or planning not to pay back loans. We are not planning to fail.
“Farmers should develop a culture of paying back loans. It is a bad culture to default as this will affect economic growth. We will certainly build safeguards with respect to who will buy the land if the farmer loses it. We will never allow anyone with a farm to purchase a farm or hold another piece of land,” he said.
Cde Chinamasa said agriculture was the mainstay of the economy and Government was assisting the sector to boost productivity.
“We cannot allow the 14,5 million hectares of land to become another communal area, to become dead capital.
“Boosting productivity is not a once-off thing. As we face new challenges, we must confront those challenges in a way of getting out. The objective has always been to be productive,” said Cde Chinamasa.
He said Government was also in the process of remapping farms with financial support from the European Union and the United Nations Development Programme.
Treasury has also provided resources to beef up the capacity of this remapping exercise.
Cde Chinamasa said the results of the exercise would inform key policy decisions such as valuations, compensation, issuance of permits and tradeable lease agreements.
He said by giving farmers permits and leases, they would have security of tenure and be able to develop their farms.
“It is not fair for someone to have a piece of land which can be taken away from him willy-nilly. The offer letter states that the piece of land can be withdrawn by the minister at any time.
“This shows farmers do not have security. Because they do not have security, they will not invest into the agricultural land. If we continue like that, it means we cannot improve agriculture production. We want to make agriculture the mainstay of the economy, to make it productive and to give farmers security against ourselves as Government,” he said.
Cde Chinamasa said the agriculture sector was important as 70 to 90 percent of the population depended on the industry.
He said Government was also working on encouraging irrigation as rain-fed agriculture was becoming unviable due to climate change.
“We are also looking at value addition. We should transform ourselves from exporting raw materials but should add value to the products,” he said.
Cde Chinamasa said Government would continue to improve the macro-environment by promoting policy clarity and consistency, protection of investment, addressing cost and ease of doing business as well as infrastructural bottlenecks among others.
“Zimbabwe is poised to achieve rapid and inclusive growth. The initiatives that Government is introducing will help mitigate the effects of drought given the importance of agriculture in Zimbabwe as well as setting a strong foundation for sustainable development,” he said.
COMMENTS
This does not make sense. How can a lease be bankable? What value is a lease worth? So if the farmer defaults on repayments how does the bank recover it’s money?
In the past the banks could sell the farm and recover their money but now what will they do? Only in Zimbabwe I guess.
If it’s in the Herald it must be true! This government is just one big joke – idiots pretending to know what they’re doing.
“Zimbabwe is poised to achieve rapid and inclusive growth.”
how?
zimasset ?
Codswallop!,
Balderdash!
Firstly “China” what are the conditions of this borrowings. Who to and to whom. If the banks are struggling now and there is no FDI flowing into the country what are you talking about. Makes no sense at all just blabbering on and on.
There are so many well heeled economists out there , why not take their advice. Oh I forgot you clowns don’t take advice.
While Chinamasa speaks this 99 lease issue the zanu pf govt is nationalising the diamond fields. They nationalised title deeds in the fast track land reform, what’s to stop them from doing this again. Therefore how can a 99 lease be bankable and if so with what bank?
The rest of the world had these in 2008. They were called a toxic loan. Some wise guys shorted against these and made billions. I am going to the banks tomorrow to create a unit that can short against these loans. Hmmm, somehow I don’t think the banks will allow me to as they know these will be defaulted on and then look at the legal mess to clear up. I believe the banks are currying favour – as per normal for Africa.
Tenure? lease?
Ten leases
For ten years.
Ten days to pack my bags.
So long suckers.
Balderdash – Not even worthy of clowns in a circus – no owned assets – no loan – simple as that, the world over – nothing new!
Will the Govt guarantee on paper that in the case of default, to pay back the lender – my foot! If they did, the queue at the banks would be 10 miles long and I having got my $’s loan would do a scarper – Tks, it’s been a pleasure doing free business!