AGRICULTURAL and Rural Development Authority (Arda) is in the process of setting up a US$100 million fund that will benefit its various estates and boost exports of farm produce, businessdigest has learnt.
By Kudzai Kuwaza
Board chairman Basil Nyabadza told businessdigest last week that Arda is working with an international investor to set up the fund by August this year.
“Arda is negotiating its own funding which all our estates will draw down from including the investors on our books,” Nyabadza said.
“The fund, which will have an initial US$100 million, will take up equity in all our estates and improve our financial position. We have received a term sheet from the potential investor and if it all goes well, the fund should be in place by August this year.”
He said accounting firm Grant Thornton will be the authority’s adviser for the fund. Nyabadza said the hiring of the international accounting firm will help boost the confidence of potential investors in Arda.
“The fund will be used to invest in all facets of agriculture under our portfolio including the offtake of the Arda graduation programme which is targeting A1, A2 and communal farmers who are growing crops for exports whether it is horticulture, whether it is cereal or whether it be plantations,” Nyabadza pointed out.
“That fund will support a deliberate export drive. In fulfillment of that, 80% of the fund will be dedicated towards exports.”
He said they are looking to increase the number of crops for export, including sorghum, millet and groundnuts, to complement tobacco exports and help reduce the country’s trade deficit. The country’s trade deficit in the first four months has reached almost US$1 billion, according to statistics by the Reserve Bank of Zimbabwe.
“There is high demand for crops such as groundnuts and sorghum outside our borders especially in South Africa,” Nyabadza said.
He said there is a strong appetite for investment in the agricultural sector, particularly in the dairy and beef sectors, as well as that of cereals and plantations. Nyabadza said there is also demand for pecan and macadamia nuts as well as avocado.
“We are now finding ourselves with a full spectrum of investors who want to take part in the medium to long-term investment in agriculture, which is a period of between 10 to 15 years.”
He said Arda has had investors in the last month who have given it a timetable to set up a dairy project, and produce pecan and macadamia nuts for the medium to long term. He said the investors are from various countries including the United Kingdom, China, Russia, Switzerland and the Netherlands.
“When we start to have this type of investor, it shows the growing confidence in the country,” Nyabadza said.