AGRICULTURE is the backbone of Zimbabwe’s economy; providing employment and income to over 60 percent of the population, supplying 60 percent of raw materials required by the manufacturing sector and contributing 40 percent of total export earnings.
However, following the imposition of the unilateral sanctions by the USA and EU several key institutions with direct influence to the agricultural sector locally were placed under sanctions.
For instance Agribank was until recently under illegal sanctions and could not finance the agriculture sector properly due to lack of lines of credit.
The bank ended up getting higher interest rates of about 15 percent instead of the usual four (4) percent from offshore banks because it was considered high risk to deal with.
Furthermore, the bank could not partner with international organisations and donors, and ended up losing a number of customers and opportunities from the outside world.
The unilateral sanctions brought a myriad of challenges to the agriculture sector. Specifically, they have made it extremely difficult to access agriculture lines of credit and attract investment. This resulted in lack of development, rehabilitation, modernisation and deterioration of production and marketing infrastructure, ultimately reducing productivity and access to markets.
The sanctions affected the livelihood of households owing to lower agricultural yields and this derailed Zimbabwe’s quest to attain the United Nations Sustainable Development Goals (SDGs) against poverty and hunger. In essence, these unjustified and illegal sanctions have violated basic human rights by directly perpetuating hunger and poverty in Zimbabwe and working against the SDGs.
The number of functional tractors declined from 14,000 before sanctions to 6,000 against a national requirement of 40,000 units. The combined capacity declined from 300 units to 130 functional units against a national requirement of 400 units.
Functional irrigation schemes also declined from 275,000 hectares to less than 206,000 hectares due to lack of repair and maintenance, rehabilitation and modernisation.
Zimbabwe has potential to irrigate up to two million hectares. However, the lack of FDI has made Zimbabwe unable to develop this irrigation potential utilising existing water bodies, underground water and trans-boundary water bodies such as Zambezi River and Limpopo River which can make a significant contribution to food security and agricultural growth in the country, especially in drought periods. The available 1,000 small, medium and large water bodies remain under-utilised, mainly due to lack of investment and foreign direct investment in irrigation development, rehabilitation and modernisation.
Zimbabwe used to have a well-developed input support, manufacturing and processing industries.
However, the lack of investment and lines of credit made it difficult for these industries to retool and invest in better plant and machinery. Plants to produce agricultural inputs such as fertiliser and seed are operating below capacity due to dilapidation and lack of repair and maintenance. This has resulted in a high cost of inputs leading Zimbabwe to be uncompetitive on the regional and international market.
With limited capacity for irrigation and investment in climate smart agriculture, Zimbabwe remains vulnerable to climate change. The country has not been able to develop its Early Warning system, resulting in the country failing to predict disasters and risks such as Cyclone IDAI which hit the eastern part of the country.
The market access for horticulture, sugar, beef and cotton, among other crops was negatively affected. Horticulture was the fastest growing sector and generated significant amounts of foreign exchange, and at one point becoming the second largest foreign exchange earner after tobacco.
The horticulture export industry grew from US$32 million in 1990/91 to a value of about US$143 million in the 1998/99 season.
However, due to sanctions the country lost most of its niche and lucrative markets for horticulture products. Previously, farmers used to export horticulture produce to the Netherlands and the UK. However, these markets were closed due to sanctions, resulting in a significant decline in the horticulture industry.
By 2005, horticulture exports had gone down to about US$72 million, with the value further tumbling to US$40 million by 2009. The horticultural industry’s contribution to the Gross Domestic Product (GDP) fell from about 4.5 percent before sanctions to the current 0.8 percent.
Under the Convention on Beef and Veal Protocol, Zimbabwe had a preferential tariff quota which allowed it to export 9,100 metric tonnes of beef into the EU annually. Under the Sugar Protocol, Zimbabwe’s preferential tariff quota stood at 30,225 metric tonnes annually. It could increase its sugar quota by a further 25,000 metric tonnes under the variable Special Preference. All the quotas were lost due to sanctions imposed on Zimbabwe.
The short supply of vaccines and other drugs indicate how sanctions affected animal health in Zimbabwe. This resulted in failure by the relevant department to control diseases like foot and mouth and this in turn affects the country’s beef export. Given that 70 percent of funding for animal health programmes was through collaborative work, the withdrawal of funds hard hit the sector. Since 2001, there have been huge shortages in vaccines, dipping chemicals and antibiotics, unlike from 1980 to 1990 where there were no recorded shortages.
The cotton industry is failing to access the EU markets directly, but only through middlemen, resulting in the loss of between 5 to 10 percent of the value of produce. The cotton industry is failing to pay for inputs, spare parts and machinery to companies outside the country. Payments are blocked; foreign companies demand first class bank guarantors and funds take long to process. ENDS