The Zimbabwean economy heavily relies on agricultural productivity and its associated supply chains across all the sectors of the economy.
However, this situation is under threat from high volumes of non-performing loans from the agricultural sector amounting to US$490 million of the US$1.13 billion of these loans.
From time immemorial, the government has come up with agricultural support policies ranging from farm mechanisation and inputs schemes, with financial institutions chipping in with loans to try to increase agricultural productivity.
A worrying statistic has emerged on the non-performing loans acquired by ZAMCO where the agriculture sector constitutes 43 percent amounting to US$490 million.
According to Agricultural Rural Development Authority (ARDA) Chairperson, Mr Basil Nyabadza, the obtaining situation is a result of an array of reasons, chief among them being the repressive inherited agricultural produce marketing system where farmers do not get the real value for their produce, hence cannot service their debts.
Second on the list of non-performing loans is the manufacturing sector with US$130 million, which also explains the low productivity in the industry due to among other things obsolete machinery.
Zimbabwe National Chamber of Commerce (ZNCC) CEO, Mr Christopher Mugaga said the turnaround strategy of the economy should be built around credit worthiness of its citizens and more importantly the business.
When financial institutions are highly exposed, the economy is not fluid and this adversely affects the investment environment of any country, hence the need to reduce the rate of non-performing loans especially to productive sectors of the economy.