daniel chigunwe
Tapiwanashe Mangwiro
The local banking sector has expressed optimism about the new land ownership policy Government announced last week that brings significant changes to land tenure system and the broader agricultural landscape, describing it as “fit for purpose.”
The policy, designed to address the long-standing issue of the bankability of 99-year leases, has input from the Bankers Association of Zimbabwe (BAZ) and other relevant institutions seeking to unlock value from the lucrative agriculture sector.
This collaborative approach, industry leaders hope, will ensure that the final legislation aligns with the financial sector’s needs and facilitates sustainable agricultural development.
BAZ chief executive officer, Fanwell Mutogo, confirmed that the association was actively involved in the consultations and its input was captured in the new regulations.
“The bankability of the 99-year lease has been a topic of discussion for several years. As an association, we have been actively involved in contributing to the provisions of the 99-year lease.
“As BAZ, we provided our input on the proposed improvements. We believe that, following extensive consultations, the Government will finalise a position that reflects the collective insights and recommendations.
“We believe that the inputs provided by the banking industry will ensure that the (policy) is fit for purpose. This will be crucial in not only supporting agriculture but also in strengthening Zimbabwe’s overall economic prospects,” said Mutogo.
The crux of the issue is the need to make land tenure documents more secure, transferable (among Zimbabweans) and bankable, enabling landholders to use their leases as collateral for financial and materials support.
This has been a major challenge for Zimbabwean farmers who, despite having land, struggled to access funding for agricultural inputs, equipment and infrastructure development. The Government’s intention, as stated by Information, Publicity and Broadcasting Services Minister, Jenfan Muswere, is to resolve this long standing challenge.
In an October 8 post-cabinet briefing, Minister Muswere outlined the Government’s plans: “All land held by beneficiaries of the land reform programme under 99-year leases, offer letters and permits will now be held under a bankable, registrable and transferable more secure document of tenure, to be issued by the Government.”
He further elaborated on the expected economic impact: “The latest measures will have a huge impact on our economic growth and will unlock the full value of the land while enhancing the performance of our economy. This will facilitate accelerated investments in agriculture and associated value chains, which include irrigation, dam construction, power supply and rural road construction.”
The move has been widely welcomed by the agricultural sector.
Zimbabwe Commercial Farmers’ Union (ZCFU) president, Dr Shadreck Makombe, expressed optimism, stating: “Having a bankable document means we will have value for our land, meaning we can trade our land as collateral. This shift allows us to focus on production, as it is just as good as having a title deed.”
Zimbabwe Farmers Union (ZFU) secretary general, Paul Zakariya, echoed similar sentiments, calling the policy a “game changer” for the agriculture sector.
“If all the modalities are put in place and all stakeholders are agreeable, then we will begin to see a flow of funding towards agriculture,” Zakariya noted.
The banking sector’s involvement is crucial as they will ultimately decide how land tenure documents are treated when it comes to lending decisions. Bankability is not just about having secure tenure but also about ensuring that the leases meet the financial sector’s criteria for collateral.
Economist, Gladys Shumbambiri-Mutsopoti, sees the policy as a positive step, but she remains cautiously optimistic.
“The introduction of a bankable land document is a progressive move. However, its success will depend on how well the Government can streamline the process of issuing these documents and ensuring that they meet the necessary legal and financial standards. If the leases are not properly structured, banks may still hesitate to accept them as collateral,” she said.
She, also highlighted the potential for this policy to drive agricultural growth.
“Unlocking the value of land will allow farmers to invest in their operations, improve productivity, and contribute to food security. However, the benefits of this policy will only be realised if the financial sector has confidence in the security and enforceability of the land documents,” she added.
Economist, Tinevimbo Shava, on the other hand, emphasised the importance of addressing existing financial bottlenecks.
“The land policy is indeed promising, especially for smallholder farmers. Yet, the challenges in accessing finance go beyond the bankability of land. High interest rates, restrictive loan terms and stringent requirements are still barriers that many farmers face.
“While the new policy might alleviate some of these challenges, it is essential that financial institutions also adapt their lending frameworks to accommodate the agricultural sector’s unique needs,” Shava said.
Shava also underscored the broader economic implications of this policy: “Agriculture remains the backbone of Zimbabwe’s economy, contributing significantly to the GDP and employment. By making land bankable, we are potentially unlocking new sources of capital for agricultural expansion, which will have ripple effects across other sectors of the economy, including manufacturing, transport and services.”
The land policy has also drawn the attention of international investors, many of whom view it as a critical step towards stabilising Zimbabwe’s agricultural sector and making it more attractive for investment.
Analysts believe that securing land tenure through bankable documents will help reduce risk perceptions and allowing for greater inflows of both domestic and foreign investment.
However, the success of the land policy will largely depend on the ability of the Government and financial institutions to implement it collaboratively and effectively.
Both Shumbambiri – Mutsopoti and Shava agree that the road ahead is complex and will require significant collaboration between the Government, financial institutions and the agricultural sector players.
The land policy represents a new chapter in Zimbabwe’s land reform saga, one that promises to blend past achievements with future aspirations. If successful, it could unlock the long-elusive value of the country’s vast agricultural resources, driving growth and development for years to come.
Bongani Ndlovu