Govt pays out US$521m to ex-farmers

STAFF WRITER

Zimbabwe has disbursed approximately US$521 million in Treasury bonds and cash payments to former white commercial farmers whose properties were acquired under the land reform programme, as the Government moves to fulfil its constitutional obligations and advance its arrears clearance and debt resolution agenda.

Finance, Economic Development and Investment Promotion Deputy Minister Kudakwashe Mnangagwa told Parliament that Treasury bonds worth US$508.8 million had been issued, alongside upfront cash payments to eligible claimants under the compensation framework.

The payments form part of the US$3.5 billion Global Compensation Deed signed in 2020, which provides compensation to approximately 3,500 former commercial farmers for improvements made to land compulsorily acquired during the fast-track land reform programme, rather than for the land itself.

Responding to a parliamentary question, Deputy Minister Mnangagwa outlined the progress made under the compensation programme, including payments to beneficiaries in three batches.

“Madam Speaker, cumulatively, a total of 623 claimants have received cash upfront payments amounting to US$7.4 million, while Treasury bonds amounting to US$508.8 million have been issued to beneficiaries under the first two batches,” he said.

“Treasury bonds for the third batch are yet to be issued and will be processed in due course and in line with the agreed compensation framework.”

The first batch comprised 378 claimants who received US$3.19 million in upfront cash payments and Treasury bonds worth US$305.47 million. The second batch covered 245 claimants, with cash payments of US$2.09 million and bonds valued at US$203.29 million.

A further 258 claimants in the third batch received US$2.15 million in upfront cash payments, although their Treasury bonds are yet to be issued.

The compensation programme is a key component of Zimbabwe’s broader debt resolution and arrears clearance process, through which the Government is seeking to address outstanding obligations and normalise relations with international creditors.

In February, the Government also began compensating investors whose farms were protected under Bilateral Investment Promotion and Protection Agreements (BIPPAs) ratified before the 2000 land reform programme.

Unlike beneficiaries of the Global Compensation Deed, who are entitled to compensation for improvements made to acquired properties, qualifying BIPPA-protected investors are entitled to compensation for both land and improvements.

To facilitate compensation, Treasury has structured the bonds with a fixed annual coupon rate of 2 percent and a maturity period of 10 years. Interest payments and other proceeds associated with the bonds are exempt from taxation.

The Government also intends to pursue a listing of the bonds on the Victoria Falls Stock Exchange, potentially providing beneficiaries with an avenue to sell their holdings before maturity rather than waiting for redemption.

The instruments have been granted prescribed asset status, making them eligible investments for institutional investors, including pension funds. This could support demand for the bonds, improve their tradability and provide beneficiaries with greater flexibility in accessing their compensation.

Editorial note: The source report contains discrepancies in its aggregate figures. The detailed amounts total approximately US$516.2 million, rather than US$521 million, while the three batches listed comprise 881 claimants, against the reported 623. These figures should be reconciled with Treasury before publication.