US$50m bond for command agriculture

US$50m bond for command agriculture

Source: US$50m bond for command agriculture | The Financial Gazette June 15, 2017

GOVERNMENT is planning to issue a US$50 million Treasury bond to finance the development of irrigation infrastructure under the command agriculture programme, according to a term sheet seen by the Financial Gazette this week.

Establishment and rehabilitation of the country’s irrigation infrastructure will be central to the success of the command agriculture programme, which is seen as the cornerstone of recovery for the agro-based economy, left devastated by the expropriation of white-owned farms for distribution to landless blacks.

The term sheet says the Treasury bond would be issued to pension funds, insurance companies, banks and other interested investors at six percent interest rate over three years.
The minimum subscription amount would be US$5 000, according to the term sheet.
Three financial institutions — Agribank, CBZ Bank and ZB Bank — have been appointed to sell the Treasury bond.

“(The purpose of the funds would be) to contribute towards command agriculture through funding of development of irrigation infrastructure,” the term sheet says.
The Treasury bond will have prescribed asset status, liquid asset status, tradability and tax exempt status.

Launched during the 2016/17 farming season to help the country return to food sufficiency following years of poor rains that had affected economic growth and investment in the agro-based economy, the command agriculture programme was funded to the tune of US$192 million by commodity firm Sakunda Holdings. Initially targeting the staple maize crop, the programme has been expanded to wheat, soya beans, fisheries and livestock.

Zimbabwe’s high country risk has prevented the country from mobilising resources on international financial markets.