Zim dithers on farmers’ US$3.5bn payment

 LIVINGSTONE MARUFU

Former farm owners who lost land during the chaotic land reform exercise will have to wait longer to get payment from the government with Zimbabwe now saying they will only pay their dues if only funds permit.

The delay in payment has been criticised by some of the farmers who have been pushing for a quick resolution as the majority of would be beneficiaries are aging.

Government is supposed to pay US$3.5bn compensation to the former farmers for the value of improvements, biological assets and land clearing costs for the land which was compulsorily acquired for resettlement more than 20 years ago.

In 2020, the government tabled the US$3.5bn offer to the former farmers as compensation for assets expropriated during the fast-track land reform exercise under the Global Compensation Deed (GCD) but has defaulted thereby raising questions on its sincerity to settle the obligation.

The government has been giving excuses for failing to pay and now brandishing the sanctions, COVID-19 and Cyclone Idai card for failing to settle their obligation.

Foreign Affairs and International Trade deputy minister David Musabayana told Business Times that the government has serious commitments to settle the US$3.5bn but was facing financial constraints.

He said the farmers should not “make noise” over the issue as that would scare away potential funders.

“If they make noise giving an impression that things are not moving, this will certainly scare away potential funders,” Musabayana said.

“We must look at the circumstances, we had Cyclone Idai which hit in 2019 which we never anticipated was a major draw on the resources to the extent that even infrastructure development programmes were suspended.

“Up to now Cyclone Idai’s effects are still with us and after that, we had a serious drought and Covid-19.

“We had a total shutdown for the whole economy for months and we had thin income streams as we had limited taxes and exports,” he said.

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

“Even if the farmers decide to be paid within a month, what can we do if the funds are not readily available?” Musabayana asked rhetorically.

“Whatever farmers decide on their referendum I don’t think it will have a bearing on the constitution as the government is straightforward on its commitment to settle the debt,” he added.

“If we have a windfall or generate enough money we will pay but as we speak we don’t have credit lines or source of funding from the International Monetary Fund or World Bank. We are doing a hand-to-mouth and we don’t have any reserves that we can take from.

“That gesture of looking for strategic partners shows a huge commitment towards payment and above all, it’s a journey we have to travel together with farmers, not a one-day event,” he added.

The government assured the former farm owners that it will not default as long-term plans are in place.

But the country has repeatedly done that.

“We also looked for strategic partners and models to raise that funding which means the government has already made commitments to pay farmers. The payment also comes at a time when we are trying to build a nation which has infrastructure which has been neglected many years ago.

“So we are saying they are being paid on the account of availability of funds.

“We have been prioritising the elderly, the sick and those who are struggling and second payments have started and going on as planned but it depends on the fund’s availability,” Musabayana said.

Three months ago, 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%.