HARARE, ZIMBABWE — Zimbabwe’s government has taken a significant step towards rebuilding its financial reputation by announcing plans to compensate foreign investors who lost assets during the country’s controversial land reforms in the early 2000s. Finance Minister Mthuli Ncube stated that 94 former farmers from countries such as Switzerland, Denmark, Germany, Netherlands, and the former Yugoslavia will receive compensation under the Bilateral Investment Protection and Promotion Agreements (BIPPAs) signed between Zimbabwe and their respective countries.
The government has allocated $20 million from the 2024 budget and another $20 million from the 2025 budget for this purpose. This move is crucial for Zimbabwe’s arrears clearance and debt resolution process, as it aims to build trust and honor commitments made to foreign investors. Ncube also emphasized that the compensation will only be given to countries where the BIPPAs were ratified properly.
The government’s goal is to clear the entire $146 million liability for BIPPA farmers by the end of 2028. This is a significant step towards rebuilding the country’s financial reputation, especially after Zimbabwe requested debt relief and restructuring from international financial institutions and other countries in 2022. According to the African Development Bank, Zimbabwe’s total foreign debt is $21 billion, including interest, which the country has been unable to service for years.
However, some economists, like Eddie Mahembe, believe that the resettled farmers should be responsible for paying the $146 million to prevent further increase in the country’s debt. Mahembe argues that since these farmers are currently farming and even selling their produce, they should be the ones to pay for the land they were allocated. He questions why the government is assuming this debt when it should be the responsibility of the individuals who are benefiting from the land.
Others have raised concerns about the government’s decision to only compensate foreign farmers and not the displaced white Zimbabwean farmers. In 2020, an agreement was reached for the government to pay $3.5 billion to the white farmers who were driven off their land under a program backed by former President Robert Mugabe in 2000. However, Trevor Gifford, former head of Zimbabwe’s Commercial Farmers Union, states that 25 years after the start of land reform in Zimbabwe, the majority of displaced title deed holders remain destitute due to the non-payment of compensation. He also points out that the government failed to honor its commitment to pay on time under the global compensation agreement, which has now expired.
Gifford’s concerns are echoed by Graham Rae, a displaced farmer who is now farming in neighboring Zambia. Rae was forced off his farm about 100 kilometers east of Harare and has yet to receive compensation. He believes that until he is compensated, he will not surrender the title deeds to the land for which he was dispossessed. Rae compares the situation to buying a stolen car and states that the government’s move to give title deeds to the resettled farmers will create confusion and deter foreign investors. He also expresses his disappointment in the lack of rule of law in Zimbabwe and the use of force to silence those who disagree.
Despite these concerns, the government remains committed to its decision to compensate foreign farmers and issue title deeds to the resettled farmers. This move is seen as a positive step towards rebuilding trust with foreign investors and honoring commitments made in the BIPPAs. The government hopes that by providing title deeds, the resettled farmers will be able to use them as collateral to borrow money for the capitalization of their businesses.
In conclusion, Zimbabwe’s government has taken a significant step towards rebuilding its financial reputation by announcing plans to compensate foreign investors who lost assets during the country’s controversial land reforms. This move is crucial for the country’s arrears clearance and debt resolution process and aims to build trust and honor commitments made to foreign investors. While there are concerns about the government’s decision to only compensate foreign farmers and not the displaced white Zimbabwean farmers, the government remains committed to its decision and hopes that by providing title deeds, the resettled farmers will be able to attract foreign investment and contribute to the country’s economic growth.
