Staff Writer
BULAWAYO — Zimbabwe’s pension funds should play a greater role in financing long-term agricultural infrastructure, with investment specialist Tawanda Mazorodze saying the country has billions of dollars in institutional capital that could help close the sector’s financing gap.
Mazorodze made the call at the 7th edition of the Zimbabwe Association of Pension Funds (ZAPF) Principal Officers and Chairmen’s Convention in Bulawayo, where he argued that the biggest challenge was not necessarily a shortage of capital, but the lack of investment instruments capable of matching pension funds’ long-term liabilities with agriculture’s long-term financing needs.
According to figures presented by Mazorodze, pension funds held about US$3.41 billion as at March 2026, while asset managers controlled about US$5.2 billion during the same quarter. He cautioned that the two pools should not be added together because much of the pension money is managed by the same asset managers.
He said the mismatch was reflected in pension portfolios, with 44% of assets invested in property, compared with 10.43% in prescribed assets, against a prescribed-assets requirement of 20%.
Mazorodze said agriculture offered sufficient scale and foreign-currency-generating capacity to absorb meaningful institutional investment.
The sector contributes about 15% of GDP, supports livelihoods for 60% to 70% of the population and generated an estimated US$10.3 billion in 2025, according to figures presented at the convention.
Agriculture also accounts for about 30% of national export earnings, while tobacco exports alone generated about US$1.2 billion.
Mazorodze said agriculture’s foreign-currency earnings could provide pension funds with an investment avenue linked to domestic productive assets while helping address the impact of currency instability on retirement savings.
However, he stressed that pension funds could not simply pour money into agriculture without appropriate structures to manage risk.
One of the major opportunities identified was irrigation, with Zimbabwe targeting 496 000 hectares under irrigation by 2030. The remaining 237 227 hectares would require an estimated US$1.66 billion in investment.
The presentation also identified a requirement for about 32 000 additional tractors, at an estimated cost of US$544 million, while expanding horticulture into a US$2.5 billion industry could require about US$795 million for orchards and packhouses.
Investment opportunities also exist in cold storage, warehousing, processing and other infrastructure aimed at reducing post-harvest losses.
The problem, Mazorodze said, is that these assets have useful lives of between three and 25 years, while much of the agricultural financing currently available is structured around a single production season.
He identified a three-to-seven-year financing gap covering projects such as irrigation, orchards, packhouses, cold storage, grading and processing.
Commercial banks generally lend against security they can register, while contractor and merchant schemes largely provide seasonal funding. Private equity can finance larger transactions, but the presentation identified a gap between these sources and the long-term needs of agricultural infrastructure.
Mazorodze also outlined several obstacles preventing pension funds from directly investing in agricultural securities.
These include difficulties registering security, the inability to split or transfer assets held by a single lender, challenges in obtaining regular valuations, crops already pledged through stop orders and inadequate protection against weather-related risks.
He proposed several investment structures that could allow pension funds to participate while addressing some of these risks.
These include warehouse receipt notes, confirmed order notes, pooled infrastructure notes, asset leases or leasebacks, quasi-equity and growth equity.
Blended finance, guarantee-enhanced facilities and other forms of credit support could also be used to reduce the risks borne by institutional investors.
For pension fund trustees, Mazorodze said the critical issue was determining whether an agricultural proposal constituted a properly structured investment security rather than a conventional loan being repackaged for institutional investors.
He identified five questions trustees should ask before committing capital: whether the security is registered; who holds it and on whose behalf; how frequently it is valued; where the investor ranks and who bears the first loss; and whether weather risk is covered and the investment qualifies under prescribed-asset requirements.
The proposed approach would create a potential bridge between Zimbabwe’s long-term institutional capital and the long-term infrastructure requirements of agriculture, while allowing pension funds to assess and manage the risks associated with investing in the sector.
