THE government and the International Fund for Agriculture and Development have signed a five-year $60 million facility for sustainable poverty eradication and improvement in food and nutrition security in semi-arid areas of Zimbabwe. The development objective of the programme is to sustainably increase diversified production, productivity and household incomes in targeted irrigation schemes of semi-arid communal and old resettlement areas of Zimbabwe.
The total cost of the agreed programme is estimated at $60 million over a period of five years. This will be financed through a loan from IFAD of $30 million; a grant from IFAD Adaptation for Smallholder Agriculture Programme (ASP) of $10 million; the government contribution in kind (through staff and tax exemptions for the programme) of $4.9 million; and co-financing by financial institutions of $15.1 million.
Addressing the signing ceremony of the IFAD facility and the Rescheduling Agreement, Finance and Economic Development Minister Patrick Chinamasa said IFAD, through a Mission to Zimbabwe in October 2015, agreed to a programme framework, which is guided by the economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset), the 10 Point Plan for Economic Growth and IFAD’s Strategic Framework.
“Let me emphasise that farmers who will benefit from this programme will pay for the investment, operation and maintenance costs. The modalities of the repayment will be developed during the programme design stage,” said Minister Chinamasa.
IFAD began its activities in Zimbabwe in the 1980s through support to the agricultural sector and to date they have administered five loans and several grants towards agricultural development.
The loans and grants include; National Agricultural Research and Extension Project — 1983; Agricultural Credit and Export Promotion Project — 1990; Smallholder Dry Areas Resource Management Project (SDARMP) — 1995; South Eastern Dry Areas Project (SEDAP) — 1998; and Smallholder Irrigation Support Project (SISP)— 1999.
As of end July 2015, the arrears to IFAD amounted to $22,683,415. “This adversely affected the government of Zimbabwe-IFAD cooperation as the governing laws of the fund do not allow full engagement and allocation of new resources when a member is in arrears.
“Accordingly, the government made a down payment of $2.3 million to clear the arrears owed to IFAD to unlock new concessional financing as part of the reengagement process. “This we believe has placed us in good standing with IFAD,” said Minister Chinamasa.
The rescheduling agreement is in line with the strategy agreed in Lima on the side lines of the 2015 International Monetary Fund/World Bank Annual Meetings. This will strengthen the reengagement efforts by the government to unlock concessional funding from IFAD.