HARARE – Zimbabwe has agreed on a new plan to compensate white farmers whose land was taken during the land reform programme under what it calls the Global Compensation Deed.
Zimbabwe announced in July 2020 that it would pay out US$3.5 billion to the white farmers with 50% of the compensation after a year and the balance within five years.
Contrary to reports that the government had reneged on this promise, Finance Minister Mthuli Ncube said the new arrangement was accepted by the farmers in September 2022 through a referendum.
Here is what Ncube said in his 2023 budget.
Under the US$3.5 billion Global Compensation Deed (GCD), in September 2022, Government made an offer for the settlement of the GCD which was accepted by Former Farm Owners through a referendum. The agreed payment plan is in two parts as follows:
- Interim cash payment of 10% (US$350 million) of the Global Compensation value (US$3.5
billion), over four years. Government will pay interim cash payments of US$35 million per year for 3 years, starting in 2023 to 2025, with the balance of US$295 million being paid in 2026 from the sale proceeds of the FFO 12.5% Kuvimba shareholding and/or sale of any other Government asset. The cash payments will be made in any jurisdiction in United
States Dollars to an account of Former Farm Owners’ choice, payable biannually in February and July; and
- Issuance of US$ Treasury bonds for the 90% balance of US$3.15 billion, with 0% coupon in the first 4 years and 1% coupon starting from the 5th year. The Treasury bonds will be issued in 2023 and have maturities ranging from 6 to 20 years. The coupon payments will be bi-annual in Mach and August in United States Dollars. The TBs will be issued with the following features:
- Prescribed asset status;
- Liquid asset status;
- Payments emanating from the bonds will not be subject to taxation, including income, capital gains and/or inheritance in Zimbabwe;
- Redeemable as and when additional resources become available to Government.