Agriculture dominates private sector credit list – NewZimbabwe.com

By Alois Vinga

AGRICULTURE needs dominated the country’s private sector credit list alongside other key economic development related actors like manufacturing, the latest Reserve Bank of Zimbabwe (RBZ) data has revealed.

The RBZ monthly economic review for the period ended March 2023 shows that Agriculture, a key economic pillar in the nation’s development matrix had the highest borrowings.

According to the report, 24,3% of the loans extended went towards supporting agriculture, 14% manufacturing, 11% distribution, services 9%, financial organizations’ and investments getting 6,2%.

Agriculture is the backbone of Zimbabwe’s economy and provides employment and income for 60% to 70% of the population, supplies 60% of the raw materials required by the industrial sector and contributes 40% of total export earnings.

Earnings derived from the agriculture sector contribute approximately 17% to Zimbabwe’s GDP.

“Credit extended to the private sector was largely utilized for recurrent expenditures at 32%; inventory build-up 30%; and fixed capital investments at 17%,” the report said.

The report also reveals that against the trend, exports sharply increased by 18,2% to reach US$515,3 million from US$435,9 million recorded in February 2023 largely attributable to  increases in exports of gold and platinum group of metals (PGMs), during the month under review.

“Gold, one of the country’s top export commodities, showed a strong rebound during the reporting month on account of elevated global prices.

“The bullion market experienced a recent uptick in prices due to global geopolitical tensions and the topical banking crisis in the US,” the report said.

The country’s export earnings for the reporting month were 7.6% lower than in the corresponding month in 2022.