Limited foreign funding hampers Zimbabwe agriculture recovery

17:33, February 25, 2011      

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An agricultural official said on Thursday limited offshore finance has hampered agriculture recovery in Zimbabwe.

Agriculture is the mainstay of Zimbabwe's economy, contributing about 17 percent to gross domestic product (GDP).

The director of planning and marketing for the newly established Agricultural Marketing Authority, Nancy Zitsanza, told Xinhua that donor funding to the country's agricultural sector had drastically dwindled over the past decade, thereby seriously affecting the country's capacity to produce enough food.

According to the International Monetary Fund, Zimbabwe's agriculture sector declined by over 70 percent between 1997 and 2008, when the government implemented the land reform program. The program saw most prime land owned by white farmers being distributed to landless black people.

However, the sector recorded a growth of 18 percent in 2009, the first in a decade after the government abandoned the inflation- hit local currency and replaced it with multiple foreign currencies.

The move stabilized the economy and induced modest growth in most sectors of the economy. Growth in the sector rose to 34 percent last year though production levels of most crops still remain low.

Zitsanza said efforts to revamp the sector were being scuttled by limited offshore finance and limited donor funding, resulting in the country failing to produce enough grain and livestock.

She reckoned that the Food and Agriculture Organization (FAO) was among the few major donors that were supporting Zimbabwe's agriculture, though on a smaller scale.

She also bemoaned high interest rates due to shortage of money in the economy.

"Tenure on loanable funds is very short and attracts very high interest rates and this is not conducive for agriculture which requires medium to long-term funding. This is not conducive for us to increase agricultural production," Zitsanza said.

Major donors in the West have withheld development aid to Zimbabwe demanding implementation of broad political and economic reforms by government.

Source: Xinhua

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