We want our money back Mthuli Ncube tells farmers who defaulted on command agriculture loans

Finance Minister Mthuli Ncube told Parliament that 30 percent of the farmers who benefitted under the government’s Command Agriculture scheme had not repaid their loans and will be black-listed.

He said the farmers will also not get any further loans going forward.

Ncube was responding to a host of questions in Parliament raised by Harare East legislator Tendai Biti.

Although he did not disclose the amount outstanding, Ncube said $50.2 million was recovered for the 2016 to 2017 season.  Some 44 617 farmers benefitted. In 2017 to 2018, $19.7 million was recovered. There were 35 756 farmers.

“Then for the wheat planting season of 2017, we have 2 270 farmers and what was recovered is US$13.7 million.  Then for the wheat planting season for 2018, we have 74 847 farmers.  Then for soya beans for the season 2017/2018 from 2 041 farmers, it is US$1.5 million,” Ncube said.

“It is true that certainly there is a delinquency rate of the order of 30%.  So, basically we are recovering 30%.  We are blacklisting those who are defaulting for a start so that they are not getting loans and support going forward,” the minister said.

“Secondly, we are continuing to recover our money – we want our money back.  That is the process that we have been following but they are also being blacklisted as well.”

Q&A:

HON. BITI asked the Minister of Finance and Economic Development to update the House on the following-

(a)     the budget deficit between January and August 2018;

(b)     the amount of money borrowed and from where during the same period;

(c)     the amount of Treasury bills issued and what they were used to finance;

(d)     the amount of  money spent on wages and pensions during this period;

(e)     the percentage of the total expenditure of the wage bill;

(f)     the amount of money spent on loan repayment and interest;

(g)     the amount of money borrowed from the Central Bank  from 2014 to 2018;

(h)     the size of the domestic debt and its breakdown; and

(i)      the amount spent on and recovered from Command Agriculture from 2016 to 2018.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): I thank the Hon. Member for the question. First of all on the budget deficit between January and August 2018, in US$ is as follows: January 2018, it is $26 million; February 2018, it is negative $61.5 million; March 2018, it is negative $146 million; April 2018, it is negative $264.6 million; May, 2018, it is negative $361.4 million; June 2018, it is negative $402.1 million; July 2018, it is negative $593.8 million and August 2018, it is negative minus $600 and I have broken it month by month. I am sure someone can add up very quickly using a calculator.

On question (b) regarding the amount of money borrowed and from where during the same period of January and August 2018, the total borrowed during that  period in terms of the Reserve Bank overdraft facility is $929.09 million and the amount borrowed by the Central Bank directly is $55.96 million and other loans it is $174.17 million. So that is it.

On (c) the amount of Treasury Bills issues and what they were used to finance. The total Treasury Bills issued for the period under review is $2.5 billion and was issued for budget financing, for capitalisation of Government institutions and for dealing with legacy debts. The holders of these instruments are banks, insurance companies and pension funds. The split of that $2.5 billion in terms of budget financing is $343.39 million was used for budget financing for dealing with legacy debts it is $1.5 billion, capitalisation and recapitalisation of State institutions it is $643.14 million and the total is $2.5 billion.

I now move on to (d). The amount of money spent on wages and pensions during the period January to August 2018. The expenditure outlay on employment costs for the period January to August 2018 stood at $2.48 billion and it is broken down as follows: Civil wages bill $1.6 billion, PSMAS $90.6 million, NSSA $23.2 million, funeral expenses $0.3 million, grant aided institutions $317.3, pensions $369 million and the total is $2.48 billion.

I move on to question (e), the percentage of the total expenditure of the wage bill. Employment cost accounted for about 86% of total expenditure and net lending over the eight months ending August 2018, and I repeat, it is 86%. The amount spent on loan repayment and interest, in January 2018, it was $9.7 million, February $9.6 million, March $27.8 million, April $9.7 million, May $717.9 million, June $29.9 million, July $47.1 million and August $33.4 million.

In terms of loans from the Central Bank, we paid interest in May 2018 of $89.8 million, July it was $3.2 million and in August it was $195.8 million. The Hon. Member also has another sub-question pertaining to the amount borrowed from the Central Bank from 2014 to 2018. I thank him for that question and he refers to the overdraft facility. In 2014, it was $126.4 million, 2015 it was $152.4 million, 2016, $663.1 million, 2017 it was $427.5 million and in 2018 it was $929.1 million and it is up to August 2018 as posed.

Then the total domestic debt at the end of August 2018 is $9.5billion and is broken down as follows: for budget financing – $429 million; legacy debt – about $4 million; RBZ debt – $266 million and for capitalisation – $1.4 billion; RBZ recapitalisation – $110 million.  Then there were TBs that were authorised for issuance by the RBZ by those who will not follow through and in the end they were cancelled.  It is about $38.3 million.  Then the arrears -$116 million; overdraft facility cumulative is $2.3 billion, I am rounding off.  So, that is the sum of the figures that I gave earlier.

The Central Bank loans – $623 million; loans from the private sector – $188 million and the total is $9.5 billion.

That is the amount spent and recovered from command agriculture from 2016 to 2018.

Basically, the amount recovered for the season 2016 to 2018 is, out of 44 617 farmers is $50.2 million.  For the season 2017 to 2018 for maize again, we had 35 756 farmers and the amount recovered was $19.7 million.

Then for the wheat planting season of 2017, we have 2 270 farmers and what was recovered is US$13.7 million.  Then for the wheat planting season for 2018, we have 74 847 farmers.  Then for soya beans for the season 2017/2018 from 2 041 farmers, it is US$1.5 million.  Thank you Madam Speaker ma’am.

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