The growth of private funding in Zimbabwe’s grain: Wheat is 76% privately funded, Natfoods cheers end of GMB maize monopoly

A combine harvester offloads wheat into a truck during a harvest at a farm in Bindura, October 2022. Most wheat is privately funded (AP Photo/Tsvangirayi Mukwazhi)

By Nyasha Chingono/Nelson Banya

The private sector will fund three-quarters of Zimbabwe’s wheat crop this year, playing a growing role in agriculture as the government opens the sector to boost food security, a commodity contractors’ body said.

Graeme Murdoch, chairman of the Food Crop Contractors Association (FCCA), made up of commodity traders, offtakers and millers who have been funding the production of crops since 2020, said traders would increase their activity.

“The reality is that as the environment becomes more liberalised, and the government makes every effort to essentially crowd in the private sector, which they have done more and more both in terms of the financing and regulation, we see more and more involvement of the private sector in primary agriculture,” he said in an interview.

About 76% of the planned 2023 wheat hectarage would be funded by the private sector, including the country’s biggest bank CBZ Holdings and the state-owned AFC Commercial Bank, Murdoch said.

The balance will be funded directly by the government through its various input support schemes as well as some self-financing farmers.

Zimbabwe has frequently struggled to feed itself since 2000, when then-president Robert Mugabe championed the seizure of white-owned farms to resettle landless Blacks.

Food production plummeted due to the exodus of skilled farmers and a lack of funding for those newly resettled. The conversion of most farms into state land left the cash-strapped government struggling as the biggest funder of food crops.

President Emmerson Mnangagwa, who replaced Mugabe in a 2017 coup, has gradually opened the door for the private sector, including banks, to fund the production of staples such as maize, wheat and soyabeans.

The government has also ended the monopoly of the state-owned Grain Marketing Board (GMB) as the sole purchaser of maize and wheat. This means that farmers are now no longer forced to sell maize to the GMB if they have funded their own production. Private players are allowed to fund maize and buy it from farmers.

National Foods, the country’s biggest maize miller, says ending the GMB’s maize monopoly will make the market more efficient.

“The group welcomes the recent policy measures which have been taken by Government in respect of the liberalisation of local grain trade. Our expectation is that this will create a more efficient market, benefiting both producers and consumers,” Natfoods said in a quarterly trading update.

After a record-breaking harvest of 375,131 tonnes of wheat in 2022, the government is targeting 408,000 tonnes this year.

Private firms under the FCCA spent US$62.7 million to fund the production of 209,138 tonnes of maize, about 9% of this year’s total maize harvest of 2.3 million tonnes, according to government data. Zimbabwe’s 2023 maize harvest is a 58% increase on the previous season’s haul.


Reuters (additional reporting: newZWire)