Parly approves $15m irrigation loan
Tabitha Mutenga Staff Reporter
PARLIAMENT has approved a $15 million loan to support smallholder irrigation projects.
The loan, advanced by the OPEC Fund for International Development (OFID), aims to reduce rural poverty and enhance food security for 25 000 small-scale, low-income farming households in rural Manicaland, Masvingo, the Midlands and Matabeleland South provinces.
Moving the motion to approve the loan in the Senate last week, Finance and Economic Development Minister Patrick Chinamasa (pictured) said subsection (3) of Section 327 of the Constitution of Zimbabwe provides that an agreement which is not an international treaty, but which has been concluded or executed by the President or under the President’s authority with one or more foreign organisations or entities and imposes fiscal obligations on Zimbabwe does not bind Zimbabwe until it has been approved by Parliament.
“The loan agreement between the Government of Zimbabwe and the OPEC Fund for International Development relating to a $15 million loan agreement to co-finance the smallholder irrigation revitalisation project in Manicaland, Masvingo, Midlands and Matabeleland South provinces, now therefore, in terms of Section 327 (3) of the Constitution, this House resolves that the aforesaid agreement be and is hereby approved,” Chinamasa said.
The loan facility has a tenure of 20 years, inclusive of a five-year grace period and will attract an interest rate of 2, 5 percent per annum, and this is inclusive of one percent administration charges. The total project cost is $51, 68 million.
The loan is over and above the $25, 5 million grant that was made available by the International Fund for Agricultural Development (1FAD) in November, 2016.’
The Government of Zimbabwe and beneficiaries will contribute $7, 9 million and $3, 8 million respectively towards the project. The $15 million is therefore a top up to meet the project cost of $51, 68 million.
The project will be implemented over a period of seven years and preparatory works commenced in July, 2017 with support from IFAD.
The Ministry of Lands, Agriculture and Rural Resettlement is responsible for the implementation of the project.
“The project will directly benefit 15 000 households in existing schemes and 12 500 households in adjacent rain-fed areas, covering a total of 8 000 hectares. Further, employment opportunities for about 2 000 youths will be created while 500 extension and technical service providers will be trained,” Chinamasa said. [email protected]