Divisions rock ex-farmers

LIVINGSTONE MARUFU

Divisions have rocked former farmers over the US$3.5bn compensation deal amid allegations the leadership could have been cajoled by the government into accepting payment outside the agreed timeline of 5 years.

Well-placed sources told Business Times yesterday that the Commercial Farmers Union (CFU) leadership was being accused of being ‘too weak’ to deal with issues at hand.

The divisions come after the government gave the former farmers four months to decide on a 20-year bond that would see the administration paying US$70m per year as compensation for assets expropriated during the fast-track land reform exercise.

According to the sources close to the developments, CFU leadership has been accused of being ‘too weak’ and seems to be ‘captured’ by the government as it accepts ‘everything’ tabled by the government.

“We are saying we don’t want the bonds as they take time to recoup our money but the leadership is taking time to tell the government that we don’t want them,” an aggrieved former farmer told Business Times .

“Why do we have to wait for December to tell the authorities that bonds are not viable given our age? The problem is that some of our leaders still have pieces of land which they were removed from and they don’t share the same pain we have.”

The CFU president Andrew Pascoe is still farming at his Ivordale Farm located 45km East of Harare along Nyamapanda road.

Recently, former CFU president Charles Tuffs said there was a need for patience saying: “Let us give the government a chance, four months is not a long time.”

Two years ago, Zimbabwe tabled a US$3.5bn offer to the former farmers.

Of that amount, US$1.75bn was supposed to be paid in July this year while the balance would be paid in installments of US$437.5m per year for the next four years.

Finance and Economic Development minister Mthuli Ncube said the bonds are securitised by international financiers who guarantee payments in case the government fails to pay within the prescribed time.

The government provided a copy of the proposed bond to all former farmers in which it plans to list bonds issued to former farmers on international stock exchanges and any payment made to compensate for farm improvements will not be taxed to sweeten the offer.

A financial advisor engaged by the government to raise the US$3.5bn, Rafael Molina, told former farmers at a recent meeting that the listing of the bonds on the international stock exchanges would create certainty that the government is committed and to give them the ability to sell in future.

Molina said the bonds would be listed on the Victoria Falls Stock Exchange and the Johannesburg Stock Exchange.

He said the bonds will be structured on the basis of affordability to pay.

Molina said interest payment will be fixed per year for the next few years and will be structured in a way that the government will commit to pay earlier than maturity.

The bonds will over time become tradable and have provision to be monetised, meaning that, one can keep the bonds, sell, use them as capital, borrow against them or can be purchased by the international investors.

But former farmers said the sweetest deal is just to pay off a significant amount by year end.

“We are tired of these sweeteners; the only sweet thing that this deal can do is to get paid this year. All the explanations he made work in other economies where there is trust as we have walked that road before and we know how bumpy it is therefore we cannot rely on bonds,” a source said.

It is not the first time that the government has defaulted on the obligation.

Last year, the government failed to pay the initial payment of US$1.75bn saying Covid-19 was ravaging the economy.

It pushed the date to July this year.