Wednesday, 29 July 2020

GOVT, WHITE FARMERS INK US$3,5 BILLION COMPENSATION DEAL

The Zimbabwe government and former white commercial farmers on Wednesday signed a US$3.5 billion compensation agreement for improvements made on farms that were acquired under the land reform programme.

President Emmerson Mnangagwa, speaking at the signing ceremony, said the agreement was a significant step towards bringing closure to the land reform programme.
  
Under its agrarian reforms over the last two decades, the government acquired excess farmland compulsorily from white farmers, who owned the bulk of the country’s arable land, to resettle landless blacks. 

This was meant to redress colonial land ownership imbalances skewed in favour of whites, and also to economically empower the country’s majority blacks.
  
“This momentous event is historic in many respects, it brings both closure and a new beginning in the history of the land discourse in Zimbabwe,” President Mnangagwa said.

“The process which has brought us to this event is equally historic as it is a re-affirmation of the irreversibility of land reform as well as a symbol of our commitment to constitutionalism, the respect of the rule of law and property rights.” 

President Mnangagwa said the compensation was being done in line with chapter 16 of the country’s Constitution, but said the agreement was only limited to improvements made on the farms and not the land itself.

“My administration reaffirms that the government of Zimbabwe does not have any obligation for compensation for acquired land. Thus, our entering into the agreement does not create any liability whatsoever,” he said.

Details of how much money each farmer would get were not immediately available, but the payments would cover the value of improvements, biological assets and land clearing costs.

“The global compensation figure will be payable in instalments as follows: a 50 percent deposit payable 12 months after signature of the agreement and one quarter of the balance in each subsequent year so that full payment is made over five years,” the agreement reads.

“The full amount of the global compensation figure may, however, be paid within 12 months of signature of the agreement if sufficient funds for the purpose are mobilised within this period.”

Mobilisation of funding is expected to commence soon while a compensation committee would verify all claims before payment is made.

“In this regard, the Republic of Zimbabwe is expected to borrow by issuing a long term debt instrument of 30 year maturity in international capital markets in compliance with the country’s debt management strategy and consistent with its key debt sustainability indicators,” it said. 

“Individual former farm owners may, at their own free will, elect not to accede to the Global Compensation Deed in which case they will not be bound by it. The government of Zimbabwe will, accordingly, withhold the pro rata amount that would have been payable to those former farm owners out of the agreed global compensation figure of USD3.5 billion if they had acceded.”

Finance and Economic Development Minister Professor Mthuli Ncube, acting Agriculture Minister Oppah Muchinguri-Kashiri signed on behalf of the government, while representatives of the Commercial Farmers Union and the Southern African Commercial Farmers Alliance and a foreign consortium, Valcon, which undertook valuations also penned the agreement.

At least 2 801 former farm owners acceded to the compensation out of 2 963 that were approached with the compensation offer.

Andrew Pascoe, head of the CFU said: “As Zimbabweans, we have chosen to resolve this long-outstanding issue.”
New Ziana






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