Online Reporter
Tawanda Musarurwa in BULAWAYO
THE country’s agriculture sector requires billions of dollars in long-term financing for irrigation, mechanisation, horticulture and storage, but most available money is short-term.
The mismatch opens a role for pension funds, which held US$3,41 billion in assets in March, according to official figures.
Mr Tawanda Mazorodze, a partner at Akribos Wealth Managers, told the 7th ZAPF Principal Officers and Chairmen’s Convention in Bulawayo on Friday that pension funds could provide the patient capital agriculture needs, but only if suitable investment products are created.
The funds have few options. About 44 percent of pension assets are in property, against a global norm of about 10 percent. That reflects a shortage of alternatives, not confidence in property, Mr Mazorodze said.
“This 44 percent that we’re putting into properties as an industry is not because we believe strongly in real estate,” he said. “It is because we do not have alternatives.”
Prescribed assets — investments in projects and institutions designated by the regulator, IPEC — make up 10,4 percent of holdings, about half the 20 percent minimum. The shortfall is about US$327 million.
A new rule letting funds invest up to 15 percent of assets outside Zimbabwe could add pressure to find local investments.
Mr Mazorodze said agriculture offers one of the clearest opportunities. It contributes about 15 percent of GDP and 30 percent of export earnings, and tobacco alone earned US$1,2 billion last year.
About one in 10 mining projects explored in Zimbabwe survives, he said, against nearer 70 percent in farming. He said agriculture also offers some protection against currency risk.
“When the Government is investing in this sector, we are definitely introducing a hedge into our portfolio, as far as currency is concerned,” he said.
The biggest problem is duration. Pension funds have obligations stretching 20, 30 or 40 years, while much agricultural finance is repaid within months.
Microfinance lenders advance about US$444 on average. Contractor and merchant schemes, which finance about 85 percent of the tobacco crop, provide money for 180 to 270 days.
Banks lend about US$1 million but generally require security they can register and enforce. And private equity operates at US$4 million to US$15 million.
That leaves a gap for three- to seven-year financing in amounts suited to irrigation, orchards, packhouses and cold storage.
“Everything that we need to do in this space requires a minimum of three- to 25-year money,” Mr Mazorodze said.
The needs are large. Irrigating 496 000 hectares by 2030, up from about 258 000, would cost about US$1,66 billion. Another 32 000 tractors, on top of 7 983 working, would cost about US$544 million. Growing horticulture into a US$2,5 billion industry would take about US$795 million.
Cutting post-harvest losses from 16,5 percent to 6 percent would take roughly US$250 million. Pension funds cannot simply finance these projects, Mr Mazorodze said, because the security many farmers offer does not meet institutional requirements.
Land is often not properly registered, and offer letters and 99-year leases cannot be transferred. A contracted tobacco grower’s crop may already be tied up through a stop order at the Tobacco Industry and Marketing Board. Weather adds risk: agriculture rebounded 27,9 percent in 2025 after the drought.
“Each problem is fixable for the cost of a registration, a trust deed or an insurance policy,” he said.
The Reserve Bank of Zimbabwe (RBZ)’s Collateral Registry, which lets equipment and livestock serve as security, recorded 13 006 registrations by June, up 43,6 percent from the end of 2025.
Land title is the biggest obstacle. Mr Mazorodze estimated US$20 billion worth of land is missing from the national balance sheet because title is disputed. He cited a 100-hectare farmer who needed only US$133 000 to convert a 99-year lease to title, an amount he said banks would not bother financing.
“It’s a chicken-and-egg situation,” he said. “We need the land to be titled for us to be able to fund it, but we do not have the title for us to be able to fund it.”
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube gave a similar estimate in August at a land tenure dialogue convened by the Land Tenure Implementation Committee.
Titling land “has the potential to unlock as much as US$20 billion, presently not accounted for in the current GDP accounting in Zimbabwe,” said the Minister.
Minister Ncube cautioned that title alone does not bring finance. “A title deed is a necessary enabler of finance, but it is not, by itself, a loan,” he said.
“Banks lend primarily against the capacity of an enterprise to generate cash flows and repay.”
He said lending must be tied to production. “The objective is not merely to increase the number of loans secured by land, but to ensure that financing results in productive investment and strengthens the farmer’s capacity to repay,” he said.
Mr Mazorodze proposed new investment products: pooled infrastructure notes of five to seven years, managed by an independent trustee and divided by risk level, plus asset leasebacks, hybrid debt-equity investments, growth investments and private lending.
Under blended finance, development lenders and the state could absorb first losses, leaving pension funds the safer portion. “Ask for the senior tranche first,” he advised. “Let someone else hold the first loss.”
Minister Ncube described the goal as a land market in which “secure rights crowd in patient capital.”
Mr Mazorodze said products should pass five tests: registered security, a trustee holding it for investors, regular valuation, clear payment priority and weather protection.
“A proposal that answers all five is a security,” he said. One that answers none “is a loan someone wants off their balance sheet.”
