Land tenure system under review to ease bank finan...

Land tenure system under review to ease bank financing for farmers

Nyashadzashe Ndoro

CHIEF REPORTER

The government is currently re-examining the land tenure system in Zimbabwe to find ways to unlock value in the agricultural sector, according to the Minister of Justice, Legal and Parliamentary Affairs, Ziyambi Ziyambi.

This move is aimed at addressing the challenges faced by farmers in accessing financing from banks due to the current leasehold system.

Speaking in the Senate on Thursday, Ziyambi said they agreed that there is need to relook the Land Tenure System as it pertains to agricultural land “in order to unlock value and ensure that farmers are able to borrow and be able to be bound by the banks in a manner that is better than what is prevailing now”.

The current leasehold system has been a subject of concern for banks, which have expressed reservations about accepting leases as collateral.

Ziyambi further explained: “Banks in general terms, the policy framework, the laws and the regulations come from the Government. Banking institutions are business institutions, they lend their money where they believe they are safe and will be able to get their money back. Ordinarily, you cannot put as surety on something that you know you cannot claim if anything goes wrong.”

Ziyambi said the government is working to address these concerns and find a solution that will make everyone comfortable, including banks, farmers, and the government itself.

“So the contentious issue with banks was, is this collateral that we are getting from this particular instrument in the manner that it is couched covering us up sufficiently,” he added.

“If anything goes wrong, are we able to get that particular piece of lease agreement and be able to transfer it to another person because that is the collateral?

“That is the conversations that we are having with banks and Government to ensure that we come up with an Instrument that will allow everyone to be comfortable, banks to be comfortable to lend, farmers to be comfortable and even to develop that particular farm.”

The Minister also added the importance of protecting the land from falling back into the hands of those who are not supposed to have it, citing the country’s history and the reasons for the liberation war.

In response to a supplementary question from Senator Irene Zindi, Ziyambi explained that the government is working to refine the leasehold system to make it more acceptable to banks and to unlock value in the agricultural sector.

He said: “You should be able to say that I have this lease. Am I secure enough to develop the farm, to put infrastructure there without waking up having that lease being withdrawn?”