THE Parliament of Zimbabwe has approved a US$37 million loan agreement between the government and the International Fund for Agricultural Development (IFAD) to support the country’s horticultural sector.
Presenting the loan agreement to Parliament, Finance, Economic Development and Investment Promotion minister Mthuli Ncube said the funds would support the Horticulture Enterprise Enhancement Project (HEEP).
HEEP aims to increase agricultural production and productivity, enhance food and nutrition security and improve income and value addition for smallholder farmers and micro, small and medium enterprises engaged in the horticultural value chains.
Ncube said the project, which would be co-financed by the OPEC Fund for International Development, would benefit smallholder farmers in Matabeleland South, Masvingo, Midlands and Manicaland provinces, as well as those in well-functioning irrigation schemes throughout Zimbabwe.
The loan has a 40-year tenure, with a 10-year grace period and an interest-free rate. The loan will also be repaid in two phases, with a 4,5% annual repayment rate from year 11 to 30 and a 1% annual repayment rate from year 31 to 40.
“The project shall benefit all smallholder farmers who will be organising what we call agricultural producer groups in village horticultural gardens.
“Therefore, no province is left behind at the risk of repeating the size of the loan of US$37,14 million and we signed this loan on the 7th of May, 2023.
“If you look at the structure in terms of interest and repayment, what is really happening is that this loan has no interest at all. It is interest free and in the first 10 years, we do not service anything, but from year 11, we start paying part of the principal at a rate of 4,5% per annum.”
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Ncube said the loan would be paid from budget appropriations, adding that there were enormous benefits including employment creation and capacity building for local communities, climate smart agriculture, and easy market access for communities.
