I agree that Zimbabwe is a work in progress. I think that the people who live in that country would benefit from learning what kind of government policies in other countries have had what kind of economic consequences.
--- In Politics_CurrentEvents_Group@yahoogroups.com, "Gary" <garyrumor2@...> wrote:
>
> Reality Check Zimbabwe
> May 28th, 2011
>
> Depending on whose perspective you read Zimbabwe is either taking off economically or it is still stuck in the doldrums. The Mugabe government seems to be entrenched in power and although there have been reforms since the power sharing agreement with the MDC or Movement for Democratic Change-Tsvangirai, things are not all smooth sailing. It seems that Zimbabwe with large gold and platinum reserves, excellent agricultural land and coal reserves could be an economic powerhouse as it once was. The problem is one of ideology and the markets. The Mugabe regime has attempted to enforce certain levels of social legislation to give land to poor blacks and to force industry to have native Zimbabwean ownership. These laudable causes have created economic instability as agriculture has collapsed, largely due to the disruption of large scale agribusiness and its replacement with small scale farming without economic support.
>
> Zimbabwe has undergone a major social experiment. The results have been mixed, with allegations flying as to whether the results have been beneficial or harmful to the average Zimbabwean. The economic consequences have been tough and the capitalists don't like the instability and the unfriendly business climate. China has been a friend to the Mugabe regime offering loans and investment when the west refused. The opposition claims that China is propping up the regime, but the question remains who are the main beneficiaries? If it is the people of Zimbabwe then who cares what the capitalists say, but if it is only a clique around Mugabe and if as it seems, the mass of people are suffering, then we can question the benefits of the Mugabe regime. It seems to me that there should be a democratic process working in Zimbabwe, but things are more complicated than surface appearances would seem. The bottom line seems to be that Zimbabwe is finding its feet after a decade of extreme struggle.
>
> The economy has been picking up since the end of the hyperinflation with the dropping of the native currency. But the country needs infrastructure development, and investment. For that to happen there needs to be a stable government. ZANU-PF, the party of the revolution that overthrew the white minority regime has been in power for three decades with only the recent power sharing agreement with MDC-T as a change. We can hope to see more democratization as things stabilize economically. The question is can attempts at economic democracy and political democracy survive in a capitalist world without major socialist players? We have minor socialist regime and former socialist experiments but no socialist bloc like we once had. We do have moves internationally for more social control of the world economy but it is still within a capitalist context and that is causing constant disruption. Zimbabwe may not be a good case for government intervention, but it is still a work in progress.
>
> ========================
> From The Times of London
>
> May 16, 2003
>
> Zimbabwe sees return of hunter gatherer
>
> No transport, no fuel, no power, just sackfuls of banknotes - a report from a collapsing nation
>
> by Jan Raath
>
> MY MAID, Nyarai, failed to turn up for work yesterday. There was no public transport and private minibuses have doubled their charges since a 283 per cent increase in petrol prices a month ago. She was unable to call because the telephone boxes no longer work.
> Nyarai would have come if she could. Her boyfriend is on forced leave because the textile factory where he works as a machinist can work only half time because of power cuts.
>
> Zimbabwe is a country rich in resources and with great potential. It used to have a well-oiled infrastructure that even South Africa, with its far bigger economy, envied. It was robust enough to withstand the first two decades of President Mugabe's rule but it has now reached the point of collapse. An advanced society is returning to the primitive.
>
> Turn-of-the-switch technology for heating, cooking and water is being replaced by fuel gathering, wood fires and water collection on foot. The bizarre and dysfunctional is the norm and very little surprises people.
>
> The expression "the wheels have come off" is on everyone's lips.
>
> In Colquhoun Avenue, an upmarket area of embassies and apartment blocks, a young man uses a long metal rod to break twigs from trees for kindling.
>
> On Samora Machel Avenue, hundreds of battered white Japanese minibuses — the core of Harare's commuter fleet — form a mile-long queue for petrol. Roads into the city from townships on the outskirts are thronged with people who have to walk to work.
>
> The country's sole sugar refinery closed this week. There is ample, locally grown, raw sugar but no coal for the refining process. Wankie Colliery, the state-owned company that sits on one of the world's biggest coalfields, has suspended production. The massive dragline that scoops opencast coal was halted when it ran out of spares. There is no foreign currency to import new ones.
>
> Harare Hospital, which serves the capital's townships, is on the verge of closing. Unable to purchase coal, the hospital has its boilers out of action and cannot sterilise instruments, launder bedding or cook food. Air Zimbabwe, the state-owned airline, could soon be grounded. It confirmed this week that it had only "two or three days" of fuel. That is more than most motorists have. A two or three-day wait in a fuel queue no longer ensures a full tank.
>
> Most queues outside service stations are referred to as "hope queues", where people leave their cars for a week at a time. When a petrol tanker arrives, bedlam erupts. Opportunists cut in front of those who have waited. Fights break out and sometimes shots are fired. Riot police arrive late, blaming the fuel shortage.
>
> In the past month, the South African and Mozambican utility companies that supply Zimbabwe with power have declared the Zimbabwe Electricity Supply Authority, the state company run by Mr Mugabe's brother-in-law, as an "interruptible customer" because of its failure to service its £22 million debt. This means that the company gets only ten minutes' notice of power cuts.
>
> Factory machinery jerks to a halt. Companies moulding tyres or plastics are left with hard, useless lumps oozing from moulds. The Zimbabwe National Chamber of Commerce estimates that fuel and electricity crises have cut industrial output to 35 per cent of normal.
>
> Officially inflation is running at 228 per cent. In reality it is out of control. The official exchange rate is 824 Zimbabwe dollars to one US dollar but on the black market it is 2,200. A white loaf cost five Zimbabwe dollars in 1998; it now costs 350. A businessman carjacked in the affluent suburb of Borrowdale last month offered 10 million dollars as reward for his year-old Mercedes SUV. That was the sum listed in the national budget ten years ago for procuring vehicles for the entire police force. The central bank still refuses to print denominations bigger than 500 dollars. At banks, depositors line up with sacks of money. At the withdrawal counter, tellers and customers can barely see each other over the wall of notes.
>
> The 500 dollar note is nicknamed the Ferrari because it is red and goes fast. It is disappearing from the streets as people hoard it. The central bank is not printing more because it has no foreign currency to import the high-quality watermarked paper and silver strips. Commercial bank officials say that it costs 700 Zimbabwe dollars to print a single 500 note.
>
> This week a bank told a businessman who buys large quantities of cotton in peasant areas that it could offer him only 50 dollar notes. "He laughed," the bank manager said. "He says he needs one billion dollars a week. In fifties, that's 40 cubic metres of banknotes."
>
> This week it cost me 2,750 dollars to airmail a letter to Britain containing three A4 sheets of paper. I covered the back and front of the envelope with 100 dollar stamps — the highest denomination — except for a small patch where I wrote the address. Interestingly, the stamp features a pretty sketch of the Tokwe Mukorsi dam, which has not been built because Cabinet ministers have been fighting over bribes for the lucrative tender for the past 15 years.
>
> The cheapest telephone call is now 24 dollars, but the largest coin is 5 dollars. The coin boxes in busy public telephones would fill much faster than the post office could collect the coins, so they have been removed. They would be replaced by computer chip card phones "depending on the availability of foreign currency", a spokesman said.
>
> Signs of poverty
>
> Life expectancy at birth: 42.9 years, down from 56.0 years in 1975 Proportion of children dying before they are five: 11.7 per cent Proportion of adult population with HIV/Aids in 2001: 33.7 per cent
>
> http://www.timesonline.co.uk/tol/news/world/article1132707.ece
>
> ==========================================
>
> From Investor Relations Issues in Africa
>
> Zimbabwe economic insights:highly recommended reading
>
> Published on 30 July 2010 by AfricanisCool in For investors, For listed companies
> 2
>
> Imara Holdings, a pan African investment banking organisation with an asset management division managing funds across Africa, and with offices in Harare, provide some really insightful research into African markets. Especially for Zimbabwe. This is some of their best stuff.
>
> Investment Notes – July/August 2010 – "Lies, Damned Lies and Statistics!"
>
> In recent weeks we have read reports from the IMF and heard the Mid-term review from Finance Minister Biti. In recent months we have also heard from companies operating on the ground in terms of their current sales and future intentions. We therefore find it hard to understand why both the IMF and Government are being as cautious as they are. That said we are pleased that they are not being overly optimistic as past Governments have tended to do. Nonetheless their views give a rather sobering view of the economy rather than an upbeat and exciting outlook for a country barely in its second year of reform that we would rather take.
>
> The IMF believes that the Zim economy is just over $5 billion. We are not sure as to where they got their figures from but we assume it is based on CSO data and their own estimates. They do however point out that "Data have serious shortcomings that significantly hamper surveillance due to capacity constraints". In past Investment Notes we have been skeptical about such a number. Zimbabwe's $5 billion economy compares with $14 billion for Zambia, a country with a similar sized population. In the past, and before the "lost decade", Zimbabwe's economy was always around 50% larger than Zambia's as our agriculture, tourism and manufacturing sectors were always much larger whilst Zambia's copper mining industry was still recovering from years of neglect. Indeed, had Zimbabwe continued on its growth path that it began from the mid 1990s, its economy today could well be a $25 to $30 billion economy. But it didn't and it's not!
>
> In this month's Notes we will be looking at what is happening on the ground to assess whether the $5billion is reasonable or not. We start by looking at Zambia. Taking both major breweries in Zambia (owned also by SAB), in the year ending March 2010, they sold a combined $230 million worth of beverages (at higher prices than in Zim). This compares with Delta that sold $324 million in a year when they could not meet demand. That could imply that the Zambian breweries may not have such a tight control of their distribution thereby allowing in competition from imported product. Or it could mean that Zimbabweans simply drink more…or importantly can afford to drink more! At the same time, Zimbabweans are due to spend around $500 million using Econet's mobile phone network in 2010. Zambians are spending only around $280m on their major network provider Zain (who no doubt charge less than Econet!). Innscor will soon be reporting their June 2010 numbers. We would not be surprised if the amount of spend that Innscor is receiving domestically from fast foods, Colcom, National Foods and Spar will take the combined spend for just these three companies alone to well over $1.1 billion in 2010. Whilst the latter company is also selling imported product, it does give an indication of the current spending power in Zimbabwe just one year after dollarization. According to the IMF and Government Zimbabwe's GNP per capita (ie economy per head) is US$450 which compares with Zambia at US$1,200 per head. The spending patterns in both countries alluded to above would suggest the opposite!
>
> If we look at Zimbabwe's major exports being generated by the mining, tobacco and cotton sectors in 2010, we also see an upbeat picture. Gold production is estimated by the Chamber of Mines to be around 7.5 tonnes in 2010 compared with 5 tonnes in 2009 and 3.5 tonnes in 2008. That's a 50% increase over the year when gold prices have reached new highs. The value of those exports should be roughly US$250m. Zimplats this year will produce around 180 million ounces of platinum plus 160 million ounces of rhodium and palladium. The value of those combined is roughly $500million. Then Anglo's Unki mine starts to sell its concentrate in the last quarter of 2010 adding to these numbers whilst Mimosa should add around $200million. In addition Zimbabwe is exporting chrome and coal and may even see `official' sales of diamonds from Marange in the second half of 2010, adding to the diamond exports from Rio's Murowa mine and River Ranch. Murowa is due to sell $30m in 2010. In the first half of 2010, the Mid-term review suggests, the value of shipments from platinum, ferrochrome and gold alone was $550 million. For 2010 as a whole a number nearer $1.2billion could be achievable for these minerals although we would expect more.
>
> In agriculture, the tobacco crop has been revised up on a number of occasions whilst the global price for our Virginia tobacco has been high due to global demand, especially Chinese. The export value of semi and processed tobacco could reach $500million in 2010, twice the amount of 2009. The cotton crop is up 18% whilst the cotton price is also higher than in 2009. The value of lint should be $200million in 2010, an increase of 60% on 2009. Thanks to the investment by Tongaat Hullet in Hippo Valley and Triangle over the past year, sugar output should jump by 24% in 2010 to 350,000 tonnes. Maize production in Zimbabwe has also increased in 2010 whilst the price has fallen sharply on World markets. The cost of importing maize should therefore be less than $100 million although the donors often fund a part of this and the cost to Zimbabwe could be lower still. Overall agricultural exports in 2010 could surpass $1 billion.
>
> So excluding manufacturing and tourism, exports from agriculture and mining might top $2.3 billion or higher in 2010. That's a bigger number than the IMF forecast that includes manufacturing exports. We have not analysed Zimbabwe's manufacturing exports for these Notes but believe that longer term, Zimbabwe's export growth will come from mining and agriculture rather than manufacturing production. That said there will always be a place for Zimbabwean manufacturers who produce niche products that can compete regionally and globally. Sadly, long gone have the days when we can or should try to compete with large scale production from China and India in mass market products.
>
> In the construction sector, PPC Cement has capacity to produce 700,000 tonnes of cement, a level that can be increased with clinker imports from SA. Lafarge Zim produces 450,000 tonnes, plus 350,000 tonnes of clinker. Meanwhile Lafarge Zambia's new plant produces 1.23 million tonnes a level that easily meets Zambian demand. Zimbabwe's cement demand is set to rise strongly as demand for housing and infrastructure increases. Investment projects announced so far by the mining companies include those for Zimplats ($445m) and Rio Tinto for Murowa ($300m). AngloPlats are also investing heavily in Unki. Recent tenders published in the newspapers highlight the amount of works about to go into housing and infrastructure for such projects.
>
> Meanwhile the financial sector has seen deposits rise from $700 million a year ago to $1.9 billion today, a growth of 167%. Year to date the growth is 40%. As a result liquidity and lending is slowly picking up. Just as we are seeing globally post the credit crunch, credit and bank loans are hard to come by. The banks themselves will admit that the cash in circulation and held by individuals could be substantial relative to the deposits in the banking system such is the mistrust in the banking system on the one hand and the size of the informal economy on the other. In some African countries the informal economy can be the same size as the recorded formal economy. Looking at Zambia again, bank deposits at the end of March totaled $1.6 billion in kwacha deposits plus another $1 billion of forex deposits, little higher than Zimbabwe today!
>
> The Mid-term review also gave some upbeat data. Tax revenues in the first six months of the year were 12% above target with Vat receipts 9% above budget. PAYE was 22% above budget and 290% above that raised twelve months before. This also explains in part why consumption is strong year on year. Corporation tax is also 54% above target. Overall revenue earned was $931million whilst expenditure was $813million thereby following the Government's cash targeting. Overall budgeted expenditure for 2010 is being held at around $2.25 billion which we believe might be nearly 50% above 2009. (the year of transition makes this comparison difficult). It would appear though that most of this revenue will be generated from local sources rather than by the "vote of credit" assumed in December's budget.
>
> Our sources are primarily those on the ground ie the operating companies, rather than the Government or the individual Ministries. We share both the Finance Minister's views and that of the IMF that the data is poor hence the revamp for the Central Statistical Office that is soon to be implemented. We wonder for example whether the mobile phone industry that barely existed ten years ago is even recorded in the statistics, or for that matter platinum! An economist who relies on Government statistics will find analysis tough. The Mid-term review reduced Government's economic growth forecast from 7% to 5.4%. The IMF revised it's down to 2.2% as they are concerned about Zimbabwe's exports falling far short of imports. Surely not! We remain totally unconvinced and further don't believe that the underlying number used for the economy, being $5 billion, is correct. As we saw in last year's December budget, the Government revised up the size of the economy from $3.5 billion to $5.1 billion but with barely a corresponding uplift in the growth rate! We would not be at all surprised to see a similar `re-rating' occur in the future. Last year we suggested that the economy is more likely an $8billion to $10 billion one. We stand by this and suggest that it might in fact be much bigger once the informal economy is included. That makes the current stock market capitalization of $3.5 billion look very cheap especially given the broad sector coverage of the economy that the Zimbabwe Stock Exchange provides investors. The Zim economy is pumping !
>
> http://www.africanir.com/2010/07/30/zimbabwe-economic-insightshighly-recommended-reading/
>
> ================================================
>
> From Afrique Avenir
> China earmarks US$10bn for Zimbabwe economy
>
> February 2nd, 2011 in Development, News
>
> APA - London (United Kingdom) China has offered to inject US$10 billion into Zimbabwe's economy, a gesture which economic analysts endorsed as "potentially huge boost to the country's ailing economy, APA learns on Wednesday in London.
>
> The Zimbabwean government rejects concern that Beijing cash could prop up President Robert Mugabe, and says investment can turn economy around.
>
> Political pundits said the £6.19 billion equivalent windfall is likely to heighten concerns about president Robert Mugabe's increasingly warm relationship with China, which has been accused of down-playing bad governance and human rights violations across Africa.
>
> China promised preferential loans to Africa (2010-2012), with over 500 infrastructure projects assistance amounting to US$10 billion, according to the country's `Information Office of the State Council'.
>
> But at the home-front, Zimbabwe's coalition government is putting up a united front on the issue, insisting that Chinese investment in mining and agriculture could help turn the economy around.
>
> While confirming the Chinese gesture, Zimbabwe's minister of Economic Planning and Investment Promotion, Tapiwa Mashakada, said : "We have met with officials from China Development Bank and they have said they are willing to invest up to $10bn in Zimbabwe".
>
> The offer is coming nearly two months after Minister Mashakada, and another cabinet minister Professor Welshman Ncube, in charge of Industry and Commerce, led a high-powered delegation to the United Kingdom capital – London for a landmark investment conference on Zimbabwe.
>
> Under the theme of the conference " Zimbabwe Rising : Exploring Partnerships for Profits and Growth", the December 2010 forum, among other objectives, aimed at showing the world that the southern African nation is ready to talk business across border.
>
> Both government ministers from the Movement for Democratic Change (MDC) told APA during interviews that their country was ready to play its part at the global market, after many years of missing from the global market.
>
> Professor Ncube, who is also the chairman of the Council of the Ministers of Common Markets for Eastern and Southern Africa (COMESA), suggested the need for regional integration for Africa as the world is fast shrinking into a global village.
>
> http://www.afriqueavenir.org/en/2011/02/02/china-earmarks-us10bn-for-zimbabwe-economy/
>
> =====================================
>
> From ITA/CIA World Factbook
>
> Page last updated on January 13, 2011
> Economy - overview:
> The government of Zimbabwe faces a wide variety of difficult economic problems. Its 1998-2002 involvement in the war in the Democratic Republic of the Congo drained hundreds of millions of dollars from the economy. The government's land reform program, characterized by chaos and violence, has badly damaged the commercial farming sector, the traditional source of exports and foreign exchange and the provider of 400,000 jobs, turning Zimbabwe into a net importer of food products. The EU and the US provide food aid on humanitarian grounds. Until early 2009, the Reserve Bank of Zimbabwe routinely printed money to fund the budget deficit, causing hyperinflation. The power-sharing government formed in February 2009 has led to some economic improvements, including the cessation of hyperinflation by eliminating the use of the Zimbabwe dollar and removing price controls. The economy is registering its first growth in a decade, but will be reliant on further political improvement for greater growth.
>
> http://www.theodora.com/wfbcurrent/zimbabwe/zimbabwe_economy.html
>
> ==========================================================
>
> From ZIMONLINE
>
> Gold output to hit 20 tonnes: Chamber
>
> by Edward Jones
>
> Saturday 28 May 2011
>
> VICTORIA FALLS – Zimbabwe's gold output could hit 20 tonnes in the short to medium term if the sector gets funding and electricity supplies improve, outgoing Chamber of Mines president Victor Gapare said yesterday.
>
> Gapare said gold production would hit between 12 and 15 tonnes this year from 9.6 tonnes last year as the mining industry slowly recovers from a decade of decline.
>
> "We have capacity to increase production to 20 tonnes, which would be 60 percent of our capacity," Gapare told the annual general meeting of the mining chamber," Gapare said.
>
> "We expect the firm prices of gold to remain. With this positive outlook for gold, it is high time we put in place policies that will allow us to ride the crest of this positive trend."
>
> Zimbabwe's mining sector contributes 7 percent to GDP and accounts for about half the country's export earnings.
>
> Heinz Pley, a managing director at Morgan Stanley's investment banking division told the meeting yesterday that Zimbabwe had the capacity to double its GDP growth but said this was possible only if Harare ensures a stable political environment and investors were guaranteed security of their investment.
>
> Zimbabwe has scared foreign investors with its plans to force mining companies to sell at least 51 percent shares to local Zimbabweans.
>
> Delegates at the meeting questioned where the government would get the money to buy the shares.
>
> "GDP could grow double digit if there was a stable political environment in Zimbabwe (and) the most important thing is security of tenure. If those things are there, this economy will grow," Pley said.
>
> Economic analysts say Zimbabwe, which has been impoverished by a decade of economic collapse, does not have the money to buy controlling shareholding in mines.
>
> The country has the second largest reserves of platinum and large deposits of gold, ferrochrome, chrome and diamonds.
>
> The empowerment drive is likely to discourage foreign investment and will hit foreign miners in the country including AngloPlat and Impala Platinum, the world's largest and second largest platinum producers, and Rio Tinto, which runs a diamond mine in the country.
>
> Rio Tinto's Zimbabwe arm, Rio Zim, this week reported that a foreign investor it did not name who had shown keen interest to pump money into the gold mining firm withdrew at the eleventh hour because of concerns over the controversial plan to transfer control of the mining sector to local blacks.
>
> The government has sought to allay fears that it would not expropriate mines but investors are still concerned.
>
> "This is not nationalisation, we are looking at broad based empowerment," Tapiwa Mashakada, Minister of Economic Planning said.
>
> Analysts say the government should take the route of increasing taxes for the mining sector as a different route to empowerment and use the money to build infrastructure like roads, hospitals and electricity generating plants.
>
> The indigenisation programme has divided the fragile unity government formed two years ago by President Robert Mugabe and Prime Minister Morgan Tsvangirai.
>
> Mugabe, whose previous government used its majority in Parliament in 2007 to ram through the indigenisation law, says the empowerment programme is necessary to ensure blacks benefit from the country's lucrative mineral resources.
>
> But Tsvangirai, who says he is for genuine indigenisation of the economy that benefits ordinary Zimbabweans, has castigated the empowerment drive as "looting by a greedy elite". —
>
> http://www.zimonline.co.za/Article.aspx?ArticleId=6709
>
> =========================================
>
> From AllAfrica.com
>
> Zimbabwe: Agriculture Fragile Despite Recovery Signs
>
> Paul Nyakazeya
>
> 30 December 2010
>
> ONCE regarded as the breadbasket of southern Africa during the first two decades after Independence in 1980, Zimbabwe has for the past 10 years become a perennial importer of food and relying more on food handouts from aid agencies after "farm invasions" which started in February 2000.
>
> Zimbabwe's agriculture sector is, however, emerging from the intensive care unit after a decade which was characterised by political unrest, drought, shortage of inputs and fuel, declining economy, unreliable electricity for winter farming and absence of collateral to access loans.
>
> It was against agricultural growth that Finance minister Tendai Biti revised upwards economic growth projection figures.
>
> The new projected economic growth rate for 2010 is now 8,1%, up 2,7 percentage points from 5,4%.
>
> Biti and the International Monetary Fund had initially projected an economic growth rate of 7,7% which they later revised downwards to 5,4% in July citing slow performance of the economy.
>
> Analysts, however, say the sector's full recovery remains fragile and will depend on political and economic stability, reliable electricity, availability of inputs, cheap loans for farmers and favourable rains.
>
> Zimbabwe Farmers' Union president Silas Hungwe told businessdigest that agriculture production had improved a lot in Zimbabwe.
>
> He said: "It was important for farmers to build on this year's encouraging output as all major sectors of the economy's revival largely depend on agriculture.
>
> "Compared to previous years the figures are encouraging. However, there is no support for the small grains, but government is making subsidised fertiliser available to farmers," he said.
>
> Hungwe said agriculture was the centre of gravity for the economy contributing 19% of the gross domestic product (GDP) last year.
>
> GDP is the most important measure of economic activity in the country as it is the crossing point of expenditure, output and income.
>
> This year's growth was mainly driven by tobacco which doubled to 120kgs on the 2009 figure. More than US$320 million was realised from the sale of the crop.
>
> In a statement this month, the Tobacco Industry and Marketing Board (TIMB), said planting for the 2011 crop had started whileâ-¯indications from seed sales showed that a minimum of 90 million kgs would be produced.
>
> About 72% of the crop that was sold this year came from contract farmers.
>
> "We are very happy to see this recovery and I think it is sustainable and it means the whole economy will recover as well," said Wilson Nyabonda, the immediate past president of the Zimbabwe Commercial Farmers' Union.
>
> However, in an earlier interview with businessdigest Commercial farmers' president Deon Theron said the country will need about US$264 million to import about 800 000 tonnes of maize and 339 000 tonnes of wheat to meet the annual national requirement.
>
> "About 800 000 tonnes of maize is needed for consumption. Maize is being imported at between US$160 and US$180 per tonne," Theron said.
>
> The national maize consumption requirement stands at two million tonnes per annum but Theron sees maize output this year at 1,35 million tonnes, a deficit of about 800 000 tonnes.
>
> Wheat is Zimbabwe's second staple grain after maize but the farmers have failed to meet its annual consumption requirements of around 350 000 tonnes.
>
> This year's national wheat target was set at 60 000 hectares but farmers planted only 11 000 hectares. Theron said Zimbabwe needed to import wheat worth over US$128,8 million to meet an expected shortfall of 339 000 tonnes, which could cripple operations.
>
> Farmers, hamstrung by lack of capital, high costs of inputs and land tenure issues and ownership wrangles, expect to produce 11 000 tonnes of winter wheat planted on 3 100 hectares this year.
>
> This is against a national annual demand of 350 000 tonnes, said Theron.
>
> Treasury allocated US$122 million to agriculture which was said to be grossly inadequate for a sector that is expected to spur economic growth.
>
> Of that amount there was no specific funding for A2 commercial farmers.
>
> A total of US$41 million was set aside for
>
> the ministry's capital expenditure, with US$11,8 million earmarked for rehabilitation and expansion of 63 irrigation schemes nationwide.
>
> Agricultural Marketing Authority (AMA) chairman Basil Nyabadza said the budget sent a clear signal that commercial farmers were on their own now and have to look for alternative funding if the sector is to be restored to its former glory.
>
> Relevant Links
> Southern Africa
> Zimbabwe
> Agribusiness
> Food and Agriculture
> Business
>
> "A2 have been cut loose from the treasury's umbilical cord. This marks the birth of the new farmer who took over Mr Jones' farm. We have now to look at in-house solutions to farmers' financing needs," Nyabadza said.
>
> "As AMA, we have started looking at comprehensive ways of funding agriculture on a permanent basis. Agriculture should look at alternative ways than continued reliance on Treasury. We need a revolving fund outside Treasury to spur agricultural production once more."
>
> In the 2011 financial year, the government has sourced loans from financial institutions for A2 farmers amounting to over US$350 million.
>
> The funding, among other things, will cater for tobacco production (US$158,9 million), cotton, soya and horticulture will receive a combined US$49,7 million and lending to individual farmers totals US$71,9 million.
>
> http://allafrica.com/stories/201012310692.html
>
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