Former white commercial farmers to be paid with Treasury Bills

Finance and Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, has said individual former white commercial farmers have agreed to be paid in Treasury Bills (TBs) after a recent referendum rejected a new payment proposal by the Government.

This could be a significant development, as it could help to resolve a long-standing dispute between the Government and the former farmers.

The Government has been under pressure to compensate the farmers for the land that was lost during the land reform programme in the early 2000s.

After defaulting twice on the agreement signed in April 2021 to pay US$3,5 billion for improvements made on the farms seized since 2000 under the country’s land reform programme, the Government came up with a revised plan, which had a longer tenure of repaying.

Under the deal, also known as the Global Compensation Deed, the farmers would have received half of the money within the first year, followed by four US$437,5 million annual instalments.

The agreement was signed by the Government and two unions representing dispossessed farmers – Commercial Farmers Union (CFU) and the Southern African Commercial Farmers Alliance.

According to the CFU, the GCD agreement had the support of 2 759 farmers out of 2896 who voted before it was signed, amounting to 95 percent. There were 137 votes against the deal.

“Individual farmers have agreed to the payment plan and they are happy to sign with the government,” Mthuli told the International Monetary Fund and World Bank Annual Meetings.

The revised plan was rejected by a referendum held in June 2023.

This left the farmers and the Government back at square one.

It is unclear what will happen next after individual farmers accepted to sign the agreements.

The situation has become so fluid and difficult to predict what will happen next, analysts have said.

However, it is critical that the Government needs to find a way to resolve the issue with the farmers, they said.

The ongoing dispute is damaging the country’s reputation and making it difficult for the country to re-engage with the western partners.

Last week, CFU chief executive Andrew Pascoe said they had engaged the country’s major creditors on way forward after the referendum rejected the new payment plan, but declined to provide more detail citing protocol issues.

President Mnangagwa’s statement in August this year that the Government may only be able to liquidate the debt to white farmers in full in “generations” is a sign of the severity of Zimbabwe’s financial crisis.

The country has been struggling to repay its debts for many years, and the compensation for white farmers is just one of many financial obligations that the Government is facing.

The Government’s debt clearance strategy is dependent on the compensation of white farmers, as this is a prerequisite for the country to receive international financial assistance. However, the Government’s limited capacity to pay the debt means that it may be many years before the debt is fully liquidated.-ebusinessweekly