Zimbabwe’s agricultural sector is witnessing a significant shift as the private sector steps forward to finance a majority of the country’s wheat crop. In a move aimed at bolstering food security, the government has opened up the sector to private investment, allowing commodity contractors and traders to play a more prominent role. With the Food Crop Contractors Association (FCCA) leading the way, private traders are set to increase their involvement, signaling a growing trend of private sector participation in primary agriculture.
Graeme Murdoch, Chairman of the FCCA, expressed his optimism regarding the growing involvement of the private sector in primary agriculture, highlighting the government’s efforts to liberalize the environment and foster private sector participation through financing and regulation. “As the environment becomes more liberalized, we see more and more involvement of the private sector in primary agriculture,” Murdoch stated in a recent interview with Reuters.
It is projected that approximately 76% of the planned wheat hectarage for 2023 will be funded by the private sector. Notable contributors include CBZ Holdings, Zimbabwe’s largest bank, and the state-owned AFC Commercial Bank, according to Murdoch. The government will finance the remaining portion directly through its input support schemes and self-financing farmers.
Zimbabwe has faced recurrent challenges in feeding its population since 2000, when former President Robert Mugabe initiated land reforms that resulted in the seizure of white-owned farms to redistribute them to landless Black farmers. This led to a decline in food production due to a lack of financial support for the newly resettled farmers. The government, burdened with the responsibility of funding food crop production, struggled due to limited resources further worsened by drought and international embargo’s.
President Emmerson Mnangagwa, who assumed office following in 2017, has been gradually embracing the involvement of the private sector, including banks, in financing staple crops like maize, wheat, and soybeans. As part of this transition, the government has also ended the Grain Marketing Board’s monopoly as the sole purchaser of maize and wheat.
Building on the success of last year’s record-breaking wheat harvest of 375,131 tonnes, the government has set an ambitious target of 408,000 tonnes for this year. Private firms associated with the FCCA have already invested $62.7 million to finance the production of 209,138 tonnes of maize, accounting for approximately 9% of the expected total maize harvest of 2.3 million tonnes, according to government data. This year’s maize harvest represents a substantial 58% increase compared to the previous season.
The government’s proactive measures to involve the private sector in agriculture have yielded positive results, with increased production and improved food security. By creating an enabling environment for private investment, President Mnangagwa’s administration has successfully leveraged the expertise and financial capabilities of the private sector to boost agricultural output.
Experts argue that this collaborative approach will not only increase productivity but also encourage job creation and economic growth. With the private sector taking on a more significant role in funding and regulating agriculture, Zimbabwe is well on its way to achieving sustainable food security and revitalising its agricultural sector.
Conversely, the involvement of the private sector in financing Zimbabwe’s wheat crop, along with the government’s supportive policies, marks a significant milestone in the country’s agricultural landscape. By harnessing the expertise and resources of private traders, the government aims to enhance food security, address historical challenges, and promote economic growth. This collaborative approach, under President Mnangagwa’s leadership, demonstrates a commitment to a more inclusive and prosperous agricultural sector in Zimbabwe.