‘Some white farmers accept TBs for compensation for developments on land’

Prof Ncube

Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube has said some white former commercial farmers whose land was acquired by the Government under the fast-track land reform programme have individually agreed to be compensated with Treasury Bills (TBs).

This comes from after a clique of white former farmers in a referendum on TBs as a payment alternative for compensation for developments on repossessed land declined the payment modality for improvements on the land acquired by the Government for the landless majority.

This acceptance of TBs as compensation for the land improvements on the repossessed land could be a significant development, as it could go some way in reducing the Government’s indebtedness relating to the land acquired for resettling locals.

The Government has been under pressure to compensate the white former farmers for the developments on land acquired during the land reform programme in the early 2000s.

After defaulting twice on the agreement signed in April 2021 to pay US$3,5 billion for improvements made on the farms the Government came up with a revised plan, which had a longer tenure of paying for developments on land.

Under the deal, also known as the Global Compensation Deed, the farmers would have received half of the money within the first year, followed by four US$437,5 million annual instalments.

The agreement was signed by the Government and two unions representing farmers whose land was acquired – the Commercial Farmers Union (CFU) and the Southern African Commercial Farmers Alliance. According to the CFU, the GCD agreement had the support of 2 759 farmers out of 2896 who voted before it was signed, amounting to 95 percent. There were 137 votes against the deal.

“Individual farmers have agreed to the payment plan and they are happy to sign with the government,” Minister Ncube said in Marrakech at the International Monetary Fund and World Bank Annual Meetings.

The revised plan was rejected by some of the farmers in a referendum held in June this year.

It is not entirely unclear what will happen next after a  number of individual farmers agree to sign the agreements to be paid using TBs, but may provide a pathway to resolve part of the longstanding liability to the farmers.

The situation has become so fluid and difficult to predict what will happen next, analysts have said.

However, it is critical that the Government needs to find a way to resolve the issue with the farmers, they said.

The issue of outstanding payments to the white former farmers has been damaging the country’s reputation and made it difficult for the country to re-engage with Western and multilateral financial partners.

Last week, CFU chief executive Andrew Pascoe said they had engaged the country’s major creditors on the way forward after the referendum rejected the new payment plan, but declined to provide more detail citing protocol issues.

President Mnangagwa’s statement in August this year that the Government may only be able to liquidate the debt to white farmers in full over “generations” is a sign of Zimbabwe’s commitment to resolving the matter.

The country has been struggling to repay its debts for many years due to the negative impact of illegal Western sanctions, which weighed on the growth and performance of the economy, and the compensation for white farmers is just one of many financial obligations that the Government is facing.

The Government’s debt clearance strategy is dependent on the compensation of white farmers, as this is a prerequisite for the country to receive international financial assistance. However, the Government’s limited capacity to pay the debt means that it may be many years before the debt is fully liquidated, but flexible modalities such as TBs could see it resolved quicker.

Herald

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