AMA seeks to float US$50m agro bills

The Agriculture Marketing Authority of Zimbabwe (AMA) is seeking approval to float US$50 million worth of agro bills for the purchase of maize from farmers in the 2019 marketing season.

AMA was set up by Government primarily to promote agricultural production of strategic crops such as tobacco, cotton, sugar, soya beans, maize and barley. The organisation is also mandated with promoting marketing and fair pricing of agricultural commodities and promoting contract farming through encouraging private sector participation.

Last year, AMA through the Grain Marketing Board (GMB) floated US$75 million worth of agro bills which were fully subscribed.

AMA chief executive officer Nancy Zitsanza told The Herald Business that the bills would be targeted at securing necessary funding for paying farmers.

“As AMA, we go out into the market to issue agro bills for the purpose of financing grain procurement through the GMB. Last year we did US$75 million and this year we are targeting to issue US$50 million.

“The agro bills have certain features, which they come with for purposes of attracting investors and we have started the process of seeking necessary approvals. Once we get the approval, we then go out into the market to issue the bills.

“The bills are mainly for local grain purchase to augment the efforts of Government to secure the necessary funding to pay farmers who deliver their grain to GMB. This is opposed to foreign purchases which will be required to augment the reduction in production because we are expecting reduced crops because of the drought,” she said.

On performance, the authority registered a 26 percent growth in total income to US$2,3 million for the year ended December 31, 2018 spurred by increased agricultural production during the period under review.

Net surplus increased 43 percent to US$1,054 m from US$ 729 062 recorded the prior year, while revenue for the year jumped 26 percent to US$ 2,3 million from US$1,8 million on the back of increased fees from traders, merchants and brokers.

AMA chairman Barean Mukwende, told the parastatal’s annual general meeting recently that the authority’s success for the period comes on the back of several investments made on the country’s agricultural sector, which resulted in high output.

“The agricultural sector experienced another fruitful year spurred by increases in tobacco production, cotton and horticulture production. Government continued to invest in the sector through the Presidential inputs scheme and Command Agriculture in crops and livestock.

“I am happy to report that the authority achieved a 43 percent increase in net surplus to reach US$ 1 045 million up from US$ 729 062 achieved in the year December 31, 2017,” said Mr Mukwende.

Likewise, net cash generated increased  to US$1,3 million from US$1,1 million driven by a strong operating surplus before working capital, while capital expenditure rose to US$1,5 million from US$0,196 million.

He said although the period was characterised by inflationary pressures resulting in adverse opinions by the authority’s auditors, the parastatal managed to post growth in operating expenditure from US$ 1 151 in 2017 to US$ 1 320 during the period under review.

“The financial performance for the period December 31, 2018 was good despite a challenging economic operating environment characterised by currency distortions that resulted in adverse opinion by auditors.

“Operating expenditure was affected by the growth in inflation rate raising from US$1 151 million to US$ 1 320 million,” said Mr Mukwende.