Parliament Thursday passed the International Fund for Agricultural Development Loan Authorisation Bill, allowing the government to borrow $30 million [about K30 billion] from the International Fund for Agricultural Development.
The loan’s purpose is to provide additional funds for the implementation of the Financial Access for Rural Markets, Smallholders and Enterprise Programme.
Finance Minister Sosten Gwengwe said the loan, which would assist the country with the much needed forex, would attract a 0.1 percent interest, which is “almost [as good] as free money” because interest rates are close to 10 percent internationally and more than 25 percent on the local market.
“So, to get a loan at 0.1 percent literally [means] it is just by name that we are calling it a loan.
“But it is working wonders for our rural farmers, especially smallholder farmers, giving them grants and also giving them access to markets, just to make sure that we improve the food security situation at household level, especially for the vulnerable,” he told The Daily Times.
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He said the loan has a 50-year repayment period, of which 10 years is the grace period.
“This will help the country generate the much needed forex as well as help us import critical supplies such as fertiliser, fuel and pharmaceuticals,” Gwengwe said.
The objective of the Financial Access for Rural Markets, Smallholders and Enterprise Programme is to increase access and the use of a range of sustainable financial services by rural households.
The beneficiaries would be assisted through, among other things, improved rural access to finance through existing, new and innovative informal community-based financial organisations and savings and loans products.
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Budget Committee Chairperson Gladys Ganda said her committee was given an opportunity to scrutinise the bill and has since made some recommendations.
“As we move forward, let us remember that this additional financing can truly uplift our rural communities and eradicate poverty.
“We strongly commend the government and ask it to consider our insights seriously as we endeavor to shape a more prosperous future for our nation,” she said.
Making his contribution before the bill was passed, Mwanza Central parliamentarian Nicholas Dausi said there was a need for the country to go back to serious agriculture.
He urged Cabinet ministers and fellow legislators to lead by example by venturing into serious farming.
“If we have food, we have everything. Priority should be food,” he said.
Leader of the House Richard Chimwendo Banda concurred with Dausi, urging fellow legislators to lead by example by venturing into agriculture.
