GOVERNMENT has, to date, disbursed US$508 million in Treasury Bonds, while it has made cash payments of US$12.6 million to white former commercial farmers whose land was acquired during the country’s Land Reform Programme.
The compensation, which has seen 623 farmers paid in three batches, marks a significant milestone towards resolving the long-standing constitutional issue and further gives impetus to the country’s arrears clearance and debt resolution.
This was said by Finance, Economic Development and Investment Promotion Deputy Minister Kudakwashe Mnangagwa in the National Assembly in a question-and-answer session recently.
Manicaland Senator Brian James had asked the Deputy Minister to provide a list of former farmers who had been compensated, indicating the amounts paid.
“Madam Speaker, cumulatively, a total of 623 claimants have received cash upfront payments amounting to US$7.4 million, while Treasury bonds amounting to US$508.8 million have been issued to beneficiaries under the first two batches. Treasury bonds for the third batch are yet to be issued and will be processed in due course and in line with the agreed compensation framework. The first batch has 378 claimants with US$3,192,398.94 worth of cash upfront and Treasury bonds worth US$305,465,685.03,” said Deputy Minister Mnangagwa.
“Batch number two has 245 claimants with a cash upfront payment of US$2,091,674.79 and Treasury bonds of US$203,294,971.44. The third batch of claimants has 258 claimants with cash upfront payments of US$2,152,852.10 and no Treasury bonds have been issued.”
The Government signed a Global Compensation Deed with representatives of former commercial farmers, in which it committed to paying them in fulfilment of its constitutional obligations.
Signed in 2020, the landmark agreement commits the Government to paying US$3.5 billion to about 3,500 former farm owners specifically for improvements made on compulsorily acquired land during the fast-track land reform programme, rather than for the land itself.
This development follows the Government’s commencement in February of compensating investors whose farms—protected by Bilateral Investment Promotion and Protection Agreements (BIPPAs) and ratified before the 2000 land reform—were repossessed.
According to the Constitution, BIPPA farmers will be compensated for both land and improvements, while those who lost land through the fast-track land reform programme will be compensated for improvements only.
The Treasury bonds being issued offer a fixed annual coupon rate of 2 percent to holders and incorporate several key features designed to make them attractive and beneficial for the former farm owners.
All payments associated with the bonds, including the annual coupon payments, are entirely exempt from taxation. This is an advantage, particularly for elderly recipients, as it ensures the compensation is not reduced by tax liabilities.
The bonds are also designed for easy trading, with the Government intending to engage the Victoria Falls Stock Exchange to list them.
This will provide farmers with the flexibility to sell their bond holdings in the market if they require immediate access to funds before the 10-year maturity.
Furthermore, the bonds are recognised as liquid assets, signifying their immediate value and near-cash equivalence.
The bonds have been granted prescribed asset status, making them appealing to institutional investors like pension funds, potentially increasing demand and supporting their value and tradability.-herald
