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Farirai Machivenyika Senior Reporter
Government has guaranteed Agro-bills issued by AFC Holdings to fund this year’s winter wheat production.
The guarantee was issued by Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube published General Notice 1917 of 2023 in yesterday’s Government Gazette.
The guarantee is for US$20 million and $8,5 billion and was issued in terms of the Constitution and Public Debt Management Act.
“The guarantee is surety in the event that AFC Holdings Limited defaults on its contractual obligations to the subscribers of the Agro-bills; (b) The purpose of the Agro-bills is to finance the 2023 winter wheat agricultural activities; (c) The total amount covered by the guarantee is an amount not exceeding twenty US$20 million and $8,5 billion in addition to accrued interest,” Prof Ncube said.
The guarantee shall remain valid and in force until April, 30 2024.
The Minister also gazetted the US$37,1 million loan agreement between Government and the International Fund for Agriculture Development that was entered into in May for the Horticulture Enterprise Enhancement Project.
The tenure of the Facility will be 40 years and the facility shall be utilised to support increased and sustainable horticultural production and sales by smallholder farmers and micro small and medium enterprises (MSME)s engaged in horticulture value chains.
“The Loan is granted on highly concessional terms, and shall be free of interest but shall bear a fixed service charge as determined by the Fund at the date of approval of the Loan by the Fund’s Executive Board, payable semi-annually in the Loan Service Payment Currency,”” Prof Ncube said.
The principal of the Loan will be repaid at 4,5 percent of the total principal per annum for years 11to 30 and one percent of the total principal per annum for years 31 to 40. The grace period is a period of 10 years after signature of the Loan Agreement.
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