HomePoliticsLoans abuse may backfire for Agribank

Loans abuse may backfire for Agribank

Itai Dzamara

THE Agricultural Development Bank (Agribank) could fail to get the proposed $150 billion from next year’s annual budget following expressions of outrage by the presidency over the handling

of this year’s allocation as well as interest rate levels.

Agribank was allocated $60 billion this year, which it has exhausted on loans to farmers. However, there are reports of gross abuse of the loan facility by government officials and that in most cases the money was used for purposes other than agricultural production.

Vice-President Joseph Msika this week said the presidency had requested a probe and an explanation from Agribank management on the allocation and use of funds as well as interest rates charged.

Msika openly disapproved of the figures presented to Zanu PF at its national congress a fortnight ago by Agriculture minister Joseph Made.

“We were shocked to hear that the rates had been increased by huge margins without our consent,” Msika said. “Something is wrong with the manner things have been done at the bank and we have ordered a probe before any funds could be released.”

Made told the Zanu PF congress that interest rates on loans had been increased from 20% to 70%, a factor which could have contributed to failure by resettled farmers to access the Agribank loans.

The parliamentary portfolio committee on budget and finance told the House two months ago that senior government officials had benefited from Agribank loans. The committee recommended a probe, which is currently under way.

Sources at Agribank said the list of names of people who accessed loans that reportedly comprised senior government officials disappeared after the parliamentary committee’s report.

Government restructured Agri-bank last year to finance the controversial land reform programme. Agricultural production has drastically gone down partly owing to failure by the beneficiaries to engage in meaningful production due to lack of capital.

Recent Posts

Stories you will enjoy

Recommended reading