Report by The Zimbabwean
A Japanese loan deal meant to benefit smallholder farmers with equipment is now in turmoil following reported interference by the army.
Sources told The Zimbabwean that Agribank, the local financial institution handling the $98 million loan, had stopped processing applications from farmers after the army headquarters ordered that communal farmers be given the equipment for free.
“Agribank management is in a quandary. Officers from Defence House visited our offices and informed management that the tractors and other equipment must be given to farmers for free to boost President (Robert) Mugabe’s popularity.
“They said the bank must therefore stop issuing loans to smallholder farmers so that communal farmers would benefit. It is not clear if the army guys came with the President’s blessing, but they seem not to be aware of the ramifications of what they did,” said a well-placed source.
The Agribank marketing manager, identified as O. Marufu, had not responded to emailed questions at the time of going to print, despite a reminder. Similarly, there was no-one answering the army phones when attempts were made to get a comment.
In May Mugabe commissioned agricultural equipment worth $38.6 million under the Japanese loan deal as a way of boosting food production under the Zimbabwe Agenda for Sustainable Social and Economic Transformation (ZimAsset) food security and nutrition cluster. He said the equipment, which included the tractors, fertiliser spreaders and irrigation kits, should benefit the whole nation.
The Zimbabwean government is supposed to repay the loan over 15 years at an interest rate of two percent per annum. The idea is that individual farmers get the tractors and pay government through the bank when they acquire the equipment.
“If the army position is not reversed, it means that government will have to pay the loan on its own while farmers will get free equipment. This is contrary to the position announced by government last year that it would not give free inputs to farmers anymore,” said a senior Zanu (PF) member who hoped to get a tractor but failed.
Victim of interference
He said the decision by the army to divert the tractors and other equipment would affect Agribank’s financial standing as it had undertaken to administer the loan. It was not immediately clear how many farmers had already received the tractors under the loan arrangement, but our sources said scores of tractors had already been dished out for free to communal farmers in several provinces.
“What you see happening here is a culture of impunity on the part of the army. Agribank, as a government bank, has been a victim of interference and manipulation by influential politicians and other individuals over the years.
“It is a miracle that it has not gone bankrupt. The reported involvement of the army in this might scare away not only Japanese, but also further external assistance in the future as no-one wants to give money where agreed terms are not guaranteed,” said John Robertson, a respected economist.
Agribank used to exclusively lend to large-scale farmers but opened the gates to smallholder farmers, a large number of who have defaulted.
The Japanese farming equipment loan has already attracted controversy, amid reports that a cabinet minister grabbed close to 100 tractors using several companies as fronts. Newly appointed local government minister, Saviour Kasukuwere, is reported to have used his political muscle to divert scores of tractors to his own companies.
Some of the companies he is said to be using as fronts to acquire the tractors are Haingate Investments, Zim Tractors and Irrigazim. The companies are registered in the names of relatives and friends, who include one TD Kasukuwere, M. Gatse and G. Hotera.
Kasukuwere, who is also the ruling Zanu (PF) national organiser, is currently embroiled in a battle with vice president Emmerson Mnangagwa over Mugabe’s succession. He is reported to be part of a group of Young Turks calling itself Generation Forty (G40) gunning for the 91-year-old’s position.
The environment minister has already appeared before a parliamentary portfolio committee on indigenisation where he is being probed on the misuse of funds in the ministry which he used to head. The committee is pressing to have him reappear before it but the minister has accused it of political victimisation.