Government has approved the remodeling of Agribank Limited into a land bank.
The Government-owned Agribank is a middle-tier financial services provider that provides commercial, retail, corporate, and international banking services.
It is unclear, however, if the new proposal to convert it into a land bank will change plans that already afoot to dispose some of its equity to private investors.
Agribank is one of the parastatals that the Zimbabwean Government is in the process of disposing.
Only last month, the financial institution said it had completed a due diligence to ascertain its asset value before calling for bids from prospective strategic partners willing to inject capital in exchange for equity.
Updating on the latest remodeling plans Information Minister Monica Mutsvangwa yesterday said:
“Cabinet considered and approved the proposed remodelling of Agribank (Pvt) Limited.
“This is in view of the fact that agriculture, among other productive sectors, is crucial in realising Vision 2030 owing to its contribution to the economy and to national security.
“Cabinet noted that the establishment of vibrant and diversified rural financial services which are underwritten by a Land Bank or its equivalent will be an important step which the country should take in order to move towards upper middle income status.
“This is in view of the realisation that smallholder farmers comprising Communal, Old Resettlement, Small-Scale Commercial and A1 farmers constitute 99 percent of the farming population, holding up to 95 percent of the productive land and owning over 90 percent of the national livestock herd.”
The remodeling of Agribank as a dedicated Land Bank is expected to deliver a number of specific outputs, including strengthening and diversifying existing agricultural and rural financial services for sustainable agrarian reform for accelerated development.
Expectations are also that the bank will also provide investment support for A1, A2 and small scale commercial farmers who have not been supported by commercial banks.
Under its new role, Agribank will link currently under-utilised land to structured markets and established value chains supplying factories, supermarkets and export markets and also provide working capital for the construction of agricultural infrastructure as well as for value addition and beneficiation enterprises.
And it will mobilize private sector finance in order to contribute to job creation, food security and social protection in rural communities.
Added Minister Mutsvangwa:
“Cabinet agreed in more details as follows: (a) that Agribank be re-modelled and re-organised to perform the functions that the Agricultural Finance Corporation used to offer to farmers in the form of short, medium and long-term loans; and (b) that a Task Team comprising the Ministries of Finance and Economic Development (Chair); Lands, Agriculture, Water and Rural Resettlement; and Industry and Commerce; the Attorney-General’s Office and the Reserve Bank of Zimbabwe be set up to look into the modalities of reconfiguring Agribank into a land bank.”