Cash-strapped Zimbabwe has pushed the deadline to pay the initial US$1.75bn compensation to former commercial white farmers to next year amid revelations the government has failed to get financial support from development partners and international financiers, it emerged yesterday.
Last year President Emmerson Mnangagwa’s administration tabled a US$3.5bn offer to former commercial white farmers for assets expropriated by the State during the land reform programme done more than 20 years ago to empower the landless majority.
Of that amount, US$1.75bn was supposed to be paid next month while the balance would be paid in installments of US$437.5m per year for the next four years.
Commercial Farmers Union of Zimbabwe (CFU) president, Andrew Pascoe, told Business Times yesterday that a new deal has since been signed.
“Given the circumstances on the ground, we have agreed with the government to roll over the first payment by July next year,” Pascoe said.
There were, however, pockets of ex-farmers who were now demanding their land back instead of financial compensation.
In a latest CFU bulletin, a document that is circulated to members, various ex-commercial farmers were demanding their land back.
“We have received the requested document from the Ministry of Foreign Affairs covering South African citizens who own property in Zimbabwe. A legal team is currently examining this. If you want to make an application for either the return of, or for compensation for your farms through the SA BIPPA or SI62 of 2020 this should be done through CFU and not the Embassy – at their request,” CFU said.
“In cases where the farms are fully resettled then alternative land may be offered. However, at the moment we are rather recommending that we watch how the applications, which have already been submitted, will be dealt with before encouraging more to be submitted.”
CFU said the same applies to investors in agriculture who are protected under other BIPPAs, who would like to make an application for the possible return of their farms.
The rollover of the payment deadline comes as the government has made an interim relief payment of US$1m to ex-farmers who are struggling to make ends meet.
The CFU executive said those that have been paid should notify the organisation so that others get paid.
“When you get paid, please, it is very important that you notify Valcon or CFU. Failure to do this would prejudice others who have not yet been paid. This is because we need to accurately reconcile those who have and have not yet been paid,” CFU said.
At least 4, 000 white farmers were forcibly evicted from farms during the land redistribution programme in the early 2000s.
Analysts say the compensation offer was important as it marked an important step to end Zimbabwe’s costly two-decade isolation by powerful western nations that imposed economic sanctions on the country after the land reform programme.
The analysts said honouring the deal could see them lifting the sanctions on the southern African country, which was once the bread basket of the region.
Several economists told Business Times that Zimbabwe, which is in arrears with international financial institutions, would find it difficult to meet its commitment.
The government set up a joint resource mobilisation committee to work with the Ministry of Finance and Economic Development to raise funds for payment of the global compensation figure.
The land compensation deal was signed by Ncube, CFU representative Pascoe, South African Commercial Farmers Alliance (SAFCA) representative Cedric Robert Wilde and Anthony Nield Purkis representing Valuation Consortium (Private) Limited (Valcon).
The CFU represents the interests of commercial farmers operating in Zimbabwe while SACFA the interests of commercial farmers in Matabeleland and Valcon the interests of all commercial farmers registered with them, some of whom are not members of either the CFU or the SACFA.
The government wanted to issue a long term debt instrument in international capital markets, to mature after 30 years, to compensate ex-farmers.
The land dispute has been haunting the government.
In 2018, a World Bank-affiliated international appeals court – the International Centre for Settlement of Investment Disputes (ICSID) -dismissed Zimbabwe’s application to annul an award granted to a former commercial white farmer.
The ICSID had in July 2015 awarded the Bernhard von Pezold family the return of their property in Manicaland Province plus their full legal costs and interest, or alternatively the Zimbabwean government was to pay the family US$195m in damages.
In October 2015, Zimbabwe sought the annulment of the award but lost.
The compensation agreement is expected to bring closure to the emotive issue which speaks to property rights.
Resettled farmers have struggled to access financing from banks who continue to shun 99-year leases as not bankable, thereby affecting production on the farms. – The Standard