Ex-farmers assessing govt proposal

LIVINGSTONE MARUFU

Former commercial white farmers are assessing a new proposal tabled by the government of Zimbabwe, amid fears the US$3.5bn compensation deal could drag into next year, Business Times can report.

Two years ago, the government tabled  the offer to the former farmers as compensation for assets expropriated during the fast track land reform exercise.

The former farmers said they were still consulting and will come up with a consolidated position,

Last month, Finance and Economic Development minister Mthuli Ncube came up with a plan to settle 10% of the full amount — US$350m — over the next four years and thereafter issue a bond in year six at a minimum coupon rate of 10%.

“We are still preparing our response to the government which we will submit once we finish the processes,” the Commercial Farmers Union president, Andrew Pascoe, told Business Times.

The new payment plan, the second within two months, comes after the government defaulted on the US$1.75bn it was supposed to pay at the end of July, according to the Global Compensation agreement signed in 2020.

Ncube then proposed a 20-year bond deal, which was rejected by the farmers due to its longevity.

CFU legal representation will submit the document to the government and discuss a way forward which they will advise the farmers.

Pascoe said former farmers now want quick payments which do not consume more time due to the age of most farmers.

“We are still assessing the new deal which proposed  a cash upfront payment to us,” he said.

It is understood that the government through its international advisors, NewState Partners, will also pursue an arrangement with IATA to put a levy on international tickets into Zimbabwe with the hope that such a levy will raise US$200m for the country.

The guaranteed cash flows will then be used to raise an instrument for US$2bn.

Treasury bonds will then be issued out in year six depending on the outcome of the initiatives.

Farmers believe that a cash payment could be a game changer as it changes farmers’ perspective on government’s commitment to the deal.

Pascoe said there should be a guarantee to protect their agreements to avoid merry go rounds that have been happening over the years.

Former farmers now want  concessions from the government which will safeguard the guarantees that the farmers are asking for, Pascoe said.

He added: “If you consider that some of the farmers will not be around by that time as some are 85 and 90 years old.”

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

This was in addition to the interim relief compensation being paid to 800 destitute white farmers.

The parties to the agreement are the government through the Finance Ministry, the Commercial Farmers Union, the Southern African Commercial Farmers Unions and Valuation Consortium.

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.

But the government has defaulted.

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

The farmers will go to a referendum where they will have an opportunity to vote for yes or no to make a decision.