• Mon. Jul 22nd, 2024

Zimbabwe to launch retooling fund to cater for value addition: FinMin

ByEconomic Times

Sep 2, 2022

By ETimes

Zimbabwe will introduce a retooling fund to try to incentivise those doing value addition, Finance Minister Mthuli Ncube said on Thursday.

The southern African nation has had a run of debilitating trade deficits because it relies too heavily on raw and semi-finished export products.

Responding to a question by an ETimes reporter during the launch of the US$30 million Horticulture Export Revolving Fund (HERF), on whether there should be an incentive or excess fund for those that export value-added horticulture produce, Ncube said they still need to tie up a few loose ends before it comes into play (retooling fund).

“On the issue of value addition, we have a separate window which is the retooling fund, which is as yet to be launched, and will be focusing on the agriculture value chain, the leather value chain, and also the chemicals sector as well,” he said.

The benefit to those who want to come into the sector is being able to access facilities in the first place.

“The act of being able to access the facility cheaply is already a benefit. Secondly, the profits that they will earn from this value addition themselves as entrepreneurs is a benefit tool, so we already have two benefits: access to finance and access to good profits.”
He added that: “I think that is a good start as an incentive. But that fund will be launched in a few weeks’ time. We are still tying up some loose ends.”

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Zimbabwe has enormous potential to cultivate and export a variety of agricultural products that are popular in important regional and global markets. However, in order for the country to realize this potential and boost agricultural export revenue, farmers’ attitudes must be changed. They must approach agriculture like a business and concentrate on market niches that can add value to various high-end goods.

Lands and Agriculture Minister Anxious Masuka said this is a very important topic, not just for horticulture but across the whole agricultural spectrum, where in the past we have been exporting raw products.

“So we want value addition and beneficiation so that we can get better returns for our effort. Each time we export a product raw, we are exporting jobs and foreign currency,” he said.

“Value addition and beneficiation I think we ought to have a special window and main share within this financing arrangement. If we could get the whole process and value chain, that is what we would be looking at.”

For Zimbabwe, the main challenges right now are growing the economy and lifting incomes to a level where people’s livelihoods are optimally enhanced. And to kickstart that process, the country needs to recapitalise the existing industries to high levels of efficiency, establish new industries to add value to other resources within the country and invest in training and skills development.

The US$30 million HERF will go a long way toward enabling our farmers to begin horticulture projects as well as acquire value-addition facilities that will enable dehydrating, freezing, canning, bottling, extracting, juicing, and concentrating their produce. This is in line with the 2022 National Budget Statement on the SDR allocation.

The facility will be made available through the regular banking channels, where qualified export horticulture applicants and intended beneficiaries must submit their requests to the participating banks with the necessary details.

For this purpose, the Memorandum of Agreement and Term Sheet for the HERF have been signed by the Government of Zimbabwe, the Reserve Bank of Zimbabwe, FBC Bank, NMB Bank, CABS Bank, and the AFC Land and Development Bank.

At its peak in 2000, the sector contributed over US$125 million in export revenue. Currently, the sector generates 77 million dollars in export revenue. The horticulture development council (HDC) estimates that the industry employs 18,700 people and has the potential to quadruple that number over the next four years, from 2022 to 2025.

In addition, the sector is anticipated to provide export revenues of $300 million annually by 2030 under the horticulture recovery and growth plan – Harare


 

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