Business Reporter
AGRICULTURE was the major beneficiary of local banks’ credit to the private sector last year.
According to statistics form the Reserve Bank of Zimbabwe, credit to the private sector grew from US$759,6 million in January to US$1,4 billion in November 2010.
The major beneficiaries were agriculture at 22,3 percent, the manufacturing sector receiving 20,3 percent, distribution 20 percent, households 7,6 percent, mining 6,7 percent, and the remainder being accounted for by other sectors.
During the period, Agribank extended total loans and overdrafts amounting to US$30,2 million to agriculture.
Despite the improvement in the value of credit, analysts believe that lending rates during the course of the year remained prohibitive to the productive sectors.
For instance, the central bank said that lending rates ranged between 12 percent and 18 percent annually, relatively much higher than the prime lending rate of 9 percent prevailing in South Africa.
Agricultural output last year is estimated to have grown by 34 percent largely driven by improved tobacco production, and the sector is expected to continue on a recovery path this year.
Official statistics show that tobacco output this year is expected to increase to between 170 and 200 million kilogrammes on the back of increased hectarage.
It is estimated that above 100 000 hectares of tobacco will be planted in the upcoming season. Tobacco output increased from 58 million kg in 2009 to 123 million kg last year.
A total of 65 000 hectares were put under tobacco, with 65 percent grown under contract, with the tobacco crop was sold at an average price of US$2,88 per kg.
Maize output is also expected to increase this season as statistics from the Ministry of Agriculture, Mechanisation and Irrigation Development show that by the end of December last year, a total of 660 000 hectares of maize had been planted, compared to 530 000 hectares planted in 2009.
Cotton output is expected to rise to              300 000 tonnes, against the background of favourable prices.
International lint prices, which rose to US$1,7 per kg during the last quarter of last year, are currently trading firm at US$1,5 per kg. Sugar output for last year is estimated at 350 000 tonnes, up from 259 000 tonnes in 2009, while production for this year is projected to increase to 450 000 tonnes, driven by expected higher production levels by Triangle and Hippo valley. The levels of private sector financing to the agricultural sector is expected to increase this year as farmers actively engage potential financiers.
The Zimbabwe Commercial Farmers’ Union is leading the way as it has said that it is engaging the private sector to raise working capital and inputs for the upcoming winter wheat cropping season.
In presenting the 2011 National Budget statement in December Finance Minister Tendai Biti said that he expected farmers “to play their part with regards to meeting some of the basic requirements for borrowing from the financial market.”

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