Zim Finance Minister Updates Ambassadors on Farm Compensation and Debt Negotiations

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HARARE – Finance Minister Mthuli Ncube, after meeting with ambassadors from countries involved in Zimbabwe’s debt negotiations, announced significant updates on the government’s farm compensation plans.

The move is seen as a critical step in addressing the country’s longstanding issues around land reform and aligning with international creditors’ demands.

The Zimbabwean government has cleared 444 farms for compensation, allocating US$35 million from the 2024 national budget for these payments. The compensation will cover infrastructural improvements made on the acquired farms but will exclude compensation for the land itself.

An additional US$20 million will be set aside for compensating 92 farms that were covered under Bilateral Investment Promotion and Protection Agreements (BIPPAs). Unlike other compensations, payments for these farms will include both the land and the associated assets, in line with legal requirements. Compensation will be directed exclusively to farmers from countries that had BIPPAs with Zimbabwe as of the year 2000, including Denmark, Switzerland, Germany, the Netherlands, and the former Yugoslavia.

Land compensation has been a contentious issue in Zimbabwe since the government’s fast-track land reform programme began in 2000. The initiative, which saw the seizure of white-owned commercial farms for redistribution, led to a dramatic downturn in agricultural productivity and strained relations with Western countries. The compensation plan, which addresses the losses incurred by the affected farmers, aims to repair these relationships and pave the way for international financial support.

The compensation package is part of Zimbabwe’s broader re-engagement efforts with international creditors. With a debt burden of US$12.3 billion, the country is seeking to secure a debt restructuring deal that would unlock new funding and aid in economic recovery. Addressing issues such as property rights, land ownership, and the rule of law are key conditions for re-engagement with global lenders like the International Monetary Fund (IMF) and World Bank.

The government’s commitment to addressing compensation has been seen as a positive step by creditors and could help in restoring confidence among international investors. This move is also crucial in resolving land tenure issues, which have been an obstacle to accessing investment and credit for Zimbabwe’s agricultural sector.

Minister Ncube’s engagement with ambassadors underscores the importance of the compensation plan in the context of ongoing debt negotiations. “We are committed to finalising these compensation processes as part of our broader strategy to stabilise the economy, attract investment, and ensure sustainable growth,” he noted.

Zimbabwe is aiming to secure a debt deal that would provide relief on repayments and facilitate new lines of credit. However, analysts warn that the process will require more than financial compensation—it will also need comprehensive reforms and assurances on governance and transparency.