Response to questions via The Patriot newspaper

10 Apr 2019

Response to Questions via The Patriot newspaper

1. Farmers from previously disadvantaged backgrounds have complained that Agribank is taking time to declare the drought a national crisis. They are questioning why you are not taking the lead to influence government to make the declaration. Why has the bank not yet done this?
It is not Agribank’s mandate to declare a drought in the country, least of all to declare the drought as a national crisis. It is also not the bank’s responsibility to influence the government to declare the drought or to declare it as a national crisis. The mandate to declare droughts in the country lies with the government. Farmers belong to farmers’ unions and these would be the correct structures which they should use to lobby government for purposes of declaring a drought in the country. The bank’s mandate is to finance agriculture, including initiatives aimed at coping with the drought, such as providing loans for fodder, water infrastructure, irrigation infrastructure, creating alternative income streams such as wood and charcoal production and similar drought-mitigating measures.

2. Secondly, they want the bank to suspend the collection of loans from them till the drought is over. What is the bank’s position on this?
The bank cannot accede to such a request on a wholesale basis. We wish to once again advise our clients to contact the bank and make appropriate repayment arrangements based on their specific circumstances. It is best that such an approach is made early. In an interview with a local newspaper last week, the Agribank chief executive officer indicated that the bank was finalising some drought assistance measures and that these will be announced in due course when finalised. It is however important to under-score that any such measures will be severely constrained by clients’ poor repayment record. The bank does not have access to unlimited cash resources and solely relies on what it collects back from clients to disburse anew. In the absence of such repayments, the bank cannot make new disbursements.

Issued by:
Sakaria Nghikembua
Chief Executive Officer

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