Home » Industry » CBZ to Float U.S $50 Million Agric Bills

CBZ Bank has issued Agricultural Marketing Authority bills worth $50 million after successfully raising $53 million in the first issue floated on June 1 this year.

The funds will help the Grain Marketing Board pay farmers for the maize to be delivered this season. The Bills have an interest rate of 10,5 percent with tenure of 270 days.

The Bills have prescribed asset status, liquid asset status, tax exemption status and have Government guarantee.

“The Government of Zimbabwe has requested AMA and CBZ bank to canvas the market for a second issue of $50 million in order to pay farmers for all the maize delivered to GMB this coming season.

“CBZ managed to successfully raise $53 million for AMA through the AMA bills floated on 1 June 2014 against a target of $55 million for the procurement of maize produced the 2013-14 agricultural season,” said CBZ in a statement.

As a result the GMB successfully paid for 141 metric tonnes out of 250 000 metric tonnes of maize delivered to their various depots.

The success of the issue has allowed maize farmers to timeously procure inputs for the coming 2014-15 agricultural season, this will ensure that maize farmers will have another successful season.

AMA this year expressed its intention to engage private sector to borrow $55 million to purchase about 250 000 metric tonnes of commercial maize.

AMA said it will borrow an additional $100 million to capacitate the Grain Marketing Board to purchase maize and small grains.

The authority, however, applied for permission from the Ministry of Agriculture, Mechanisation and Irrigation Development which then issued a borrowing certificate.

In raising capital, the Reserve Bank of Zimbabwe aised AMA to approach the African Development Bank, South Africa Investment and African Export and Import Bank to source for funds.

Zimbabwe requires about 2 million metric tonnes of maize annually for human consumption and stockfeeds production.

Last year AMA borrowed $23 million for the purchase of maize.

In light of the need to fund specific agricultural programmes last year AMA announced its presence on the market with AMA Bills to raise US$35 million to support the production of soyabeans and other grains during the 2013-2014 cropping season.

AMA, the statutory body that regulates production, buying, selling and processing of agricultural products, has been promoting contract farming for strategic crops and livestock through provision of required finance.

The body seeks to boost maize and soyabeans production given that the country has been facing grain shortages.

Source : The Herald