Renewed Bid To Make 99-Year Leases Bankable

The government has tabled fresh security mechanisms to make the 99-year leases bankable as it seeks to help resettled farmers get funding from banks, Business Times can report.

The move comes as lenders  have been rejecting the leases as collateral due to tenure uncertainty.  The lenders want immovable assets, which most farmers do not have.

Lands, Agriculture, Fisheries, Water and Rural Development minister Anxious Masuka told Business Times on the sidelines of the official opening of the 2022 tobacco marketing season in the capital  that the government was engaged in serious negotiations with local banks  to make the 99-year leases bankable.

“Government has made submissions on the bankability of the 99-year lease and an announcement shall be made soon as we move to enhance production and productivity on farms. As the ministry, we want to transform the 21 000 A2 farmers to become perennially successful businesswomen and businessmen by 2025,” Masuka said.

The ministry, Masuka said, seeks to transform the 360 000 A1 farmers to become formal and viable small-to-medium enterprises by 2025.

The 99-year leases were first issued in 2006 to resettled farmers that had benefitted from the fast-track land reform programme at the turn of the century.

But banks argued that the leases could not be used as collateral since the land  belonged to the State and could not be  sold to recover funds  in the event farmers defaulted on loan repayments.

This has resulted in farmers failing to benefit from funding from financial institutions.

For years, the government has been failing to convince local lenders to provide loans to farmers.

Masuka said production return forms that are submitted by February 15 of each year will determine who would get the 99-year lease.

“Both A1 and A2 farmers are now required to submit annual production and productivity returns. For A2 farmers, these returns form the basis for assessment for eligibility for a 99-year lease. Now farmers need not apply for such leases. Farmers also need not pay for applications for such leases. This is now an automatic process, which should motivate farmers to produce more,” Masuka said.

Officials from the Ministry of Finance and  Economic Development, Lands, the Ministry of Agriculture, Fisheries, Water and Rural Development and the Bankers’ Association of Zimbabwe also confirmed that the parties were on the brink of a major breakthrough on 99 -year leases.

Banks are  only offering loans that do not exceed the forced sale value of assets listed as collateral.

This strategy protects both the borrowers and the banks.

Pursuant to ensuring that farmers achieve maximum productivity, the Cabinet  recently approved the Land Commission Bill to clear out multiple farm owners, resolve land disputes and deal with land beneficiaries leasing out farms to those who are not entitled to them.

The land audits will be carried out by the Land Commission  as stipulated  in Section 296 of the Constitution.

The Commission will carry out periodic audits and ensure accountability, fairness and transparency in the administration of agricultural land controlled by the State. BusinessTimes