Fresh bid to salvage land compensation deal

White farmers whose farms were acquired under Zimbabwe’s land reform programme about two decades ago said they are re-negotiating the compensation deal with the Government after the State, for the second time, missed the US$1,75 billion initial payment it pledged under the US$3,5 billion deal signed in June 2020.

Without openly admitting that the deal could be getting off the rail, Commercial Farmers Union president Andrew Pascoe signalled serious challenges over the unfulfilled pledge.

Under the deal, also known as the Global Compensation Deed, the farmers would receive a total of US$3,5 billion. Half the money was supposed to have been paid out within the first year, followed by four US$437,5 million annual instalments.

Last year in April, the Government appointed London-based NewState Partners as transaction advisors to help raise the compensation funds from international financiers.

“We are still negotiating,” Pascoe said, “to try and see how the deal can be salvaged”.

Zimbabwe embarked on the land reform programme at the turn of the millennium, an exercise that several analysts blame for decimating the country’s agricultural sector.

However, the Government argued that the programme was meant to correct colonial imbalances since only over 4 000 white commercial farmers, at the time of the exercise began, owned vast tracts of land at the expense of local people, 20 years after independence.

The land exercise triggered massive disapproval from western countries, which responded by imposing sanctions on Zimbabwe.

While President Mnangagwa’s administration has maintained that the land reform programme was irreversible, compensation for farm improvements is seen as critical in mending ties with the west.

“The Government needs to fulfil its pledge and that will help the west and international financers shift its foreign policy stance on Zimbabwe,” Carlos Tadya, a Harare-based economist told Business Weekly in an interview on Thursday.

Another analyst, Terence Mupesa said “the Government is missing an opportunity to mend ties with the west” but indicated that “it was never going to be easy to raise the money over such a short period given our bad record of repaying debts”.

“What is also important to note is that international financiers believe that the Government has failed to translate political rhetoric into action and there is still a trust gap.

“They still believe a lot of reforms have not been done and still want to see more on the reforms.

In its analysis of the agreement, UK-based Economist Intelligence Unit said “the Government’s proposal for raising the funds for compensation would face major delays and be watered down. We do not expect substantial compensation to be paid to the farmers in the medium term, and relations with the West will remain poor.”

Over the years, Zimbabwe has had more than its fair share of instances where property and human rights were flouted including violations of the BIPPAs. So far, white farmers have only received US$1 million, which was part of a dividend declared by Kuvimba Mining House, a State-owned mining entity with vast mining assets.

Calls seeking comment from Finance and Economic Development Professor Mthuli Ncube were not answered at the time of publishing.-ebusinessweekly