ED meets ex-farmers

LIVINGSTONE MARUFU

Former commercial white farmers have expressed confidence the government would pay the much anticipated US$1.75bn by July this year for assets expropriated  by the State  during the land reform programme more than two decades ago.

The latest development comes after the ex-farmers met President Emmerson Mnangagwa and Finance and Economic Development Minister, Mthuli Ncube recently, to discuss the matter.

The government and the former farmers  signed a US$3.5bn compensation deal two years ago.

The administration was supposed to pay the first installment of US$1.75bn in July last year,  and the balance to be paid in installments of US$437.5m a year for the next four years.

But, the cash-strapped government conceded it had no capacity to pay the initial US$1.75bn owing to the effects of the Covid-19 pandemic.

Commercial Farmers Union president Andrew Pascoe told Business Times that the first payment scheduled for July this year was a make or break deal for both the government and the former farmers.

“We were not told how they are going to pay the US$1.75bn by July 2022 . But, after the meeting with His Excellency (Emmerson Mnangagwa) and Ncube  early this year, we are confident that the deal will go through,” Pascoe said.

With the government failing to pay the initial installment last year, some former farmers started demanding their land back instead of compensation.

Last year, the government said it has made an interim relief payment of US$1m to ex-farmers who are struggling to make ends meet.

At least 4 000 white farmers were forcibly evicted from farms during the land redistribution programme in the early 2000s.

Analysts say the offer was critically 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 the powerful nations 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.

Analysts say the breach in the agreement will tear into shreds Mnangagwa’s promise to protect investments under his “Zimbabwe is open for business” mantra.

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 amount.

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 represents 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, the compensation document said.

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 that continue to shun 99-year leases as not bankable, thereby affecting production on the farms.