HARARE - The Reserve Bank of Zimbabwe (RBZ) has warned President Robert Mugabe’s government against continued land grabs, which are affecting agricultural production and increasing the country’s political risk profile.
“Bringing finality to the land reform programme would go a long way in addressing uncertainties that continue to adversely affect this sector from achieving its potential in transforming the economy,” RBZ governor John Mangudya said.
This comes as the country, which embarked on a controversial and violent land reform programme 16 years ago that decimated the once vibrant agriculture sector, has continued to consistently chase white commercial farmers from the land.
Last week, a white commercial farmer Phillip Rankin was forcibly removed from his farm when police stormed his property to enforce a claim by a Zimbabwean-born British doctor Sylvester Nyatsuro.
However, Mangudya said it was necessary that after the implementation of the fast track land reform by government, the next step should be to restore and preserve productivity on the farms in order to create real wealth and jobs.
“This should be done by capacitating farmers through the extension of affordable credit, training, technical expertise as well as assessing the number of productive and unproductive farms for efficient allocation of scarce resources,” he advised government in his monetary policy statement.
At its peak in the 1990s Zimbabwe’s agricultural sector used to contribute over 30 percent to the country’s gross domestic product and is now contributing an average of 13,7 percent — according to official figures — due to the subsequent land acquisition exercise, which destabilised farm production.
The seasoned economist and central banker said farming is a business and must be taken seriously for the country to achieve high income growth and overall economic transformation.
“It is now high time that the nation put in place measures that will move farmers out of subsistence practices and have them operate as formal business entities. This should be done by decisively addressing some of the challenges that continue to collectively stifle the performance of agriculture.
“Chief among these challenges are lack of access to affordable finance, insatiable appetite to occupy land at the expense of production, and poor supporting infrastructure for the majority of farmers,” he said.
Addressing of these challenges by government and the financial institutions, Mangudya said, would transform farming, both small and large, into viable business for the benefit of the economy and to ensure food security.
Zimbabwe, which used to be the breadbasket of the southern African region, has faced hunger and starvation in the past decade with the government blaming droughts and sanctions.
But critics say over 400 000 resettled farmers had no adequate training and lack of access to finance due to lack of collateral resulting in poor yields.
To help overcome these challenges, Mangudya believes government should expedite the valuation process of the remaining farms and coming up with a financing model for compensating the previous farmers for farm improvements as part of measures to reduce uncertainty and increase investment and productivity in agriculture.
He further urged the Zanu PF-led administration to create security of tenure so that the land can be used as collateral security in accessing financing from financial institutions.
“Hence the crafting of a land policy which enables the creation of a land market is key to unlocking financing through formal channels. The urgent resolution on the bankability of 99-year-leases will enable active participation of the financial institutions in agricultural development,” he added.