By Ndafadza Madanha
ZIMBABWE is keen on attracting investment in the agriculture sector in order to increase productivity according to a senior government official currently in Berlin scouting for prospective investors.
Deputy Minister of agriculture Douglas Karoro, who is in Germany attending the Global Forum for Food and Agriculture, took the opportunity to outline some potential investment opportunities in the agribusiness sphere to delegates.
Karoro said the agriculture sector which grew by 12.4% in 2018 and is projected to grow by 9,4% in 2019 owing to the EL Nino induced drought before rebounding in 2020 with growth projected to be 16.2%.
He said the major challenge affecting agribusiness is low domestic and foreign investment following years of economic isolation characterized by low capital inflow, low technology, knowledge and skills transfer.
Further strained economic and political relations between Zimbabwe and the European Union have led to illiquid capital and money markets resulting in limited access to international lines of credit to extend affordable loans to local farmers.
Karoro said opportunities lay in the provision of production and marketing as most infrastructure had gone through years of deterioration with no rehabilitation or expansion.
Irrigation, mechanization, warehouses, greenhouses, cold chain is some of the areas which are in desperate need for investment.
The country requires 45 000 tractor units against the current size of 6 000 units while only 220 000 ha of irrigation out of 2 million ha potential.
He said some of the incentives government is offering to potential investors include Build Own Operate and Transfer (BOOT) and BOT Arrangement which gives a tax holiday for first 5 years and is taxed at 15% for the second five years.
Other incentives include Manufacturing or Processing Companies , Special Initial allowance (SIA) allowed on expenditure incurred on construction of new industrial buildings, farm improvements, railway lines, staff housing and tobacco barns.
Also allowed on additions or alterations to existing items. Further allowed on articles, implements, machinery and utensils purchased for purposes of trade. The allowance is optional and once claimed this replaces wear and tear. It is allowed at the rate of 25% of cost from year one.