AMA plans to raise $100m for GMB

The Agricultural Marketing Authority (AMA) plans to float grain bills to raise $100 million for the Grain Marketing Board (GMB) to fund the procurement of maize produced during the 2014/15 agricultural season.

Last year, CBZ floated two issues of AMA bills, raising nearly $60 million for the GMB. The first issue raised $53.6 million out of $55 million. The bills have a 270-day tenure and an interest rate of 10.5 percent.

In the 2013/14 season GMB received 220 000 tonnes from farmers but has only paid for 50 percent of the grain delivered. The second issue for $50 million closes in July and is meant to settle GMB’s outstanding balance of $47 million. It has so far raised $4.8 million.

“Right now we are in the market trying to raise the money so far we have raised close to $5 million which we have given to GMB to pay farmers,” AMA chief executive Rockie Mutenha told a parliamentary committee on Lands, Agriculture Mechanization and Irrigation today.

Mutenha said the authority intends to approach financial institutions to raise up to $100 million for the forthcoming season, depending on the success of the current bill.

The grain bills are securitized by government.

“This will only be possible if government manages to repay the bills raised under the $55 million facility as this will instill confidence in the market,” he said.

Mutenha said AMA was also planning to float another bill to raise $5 million for slaughter stock for struggling Cold Storage Company (CSC), which will increase the company’s capacity.

The number of cattle being slaughtered at CSC has gone down from 50 000 per month before the year 2000  to current levels of just under 2 000 monthly, he added.-The Source

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