News / Local
Zim starts paying farmers
25 Jun 2021 at 07:50hrs | Views
ZIMBABWE made its first compensation payment according to an agreement to settle a dispute with white commercial farmers who had their land allocated to indigenous people two decades ago.
The State-linked Kuvimba Mining House Ltd transfered US$1 million to the farmers as the government asked for a delay in paying the full US$3,5 billion compensation it had agreed to a year ago.
While the payment is a fraction of that agreed to, resolving the dispute is key to the country pulling out of the economic stagnation that the seizures, ordered by then President Robert Mugabe, triggered.
Exports plunged, relations with multilateral lenders were severed, the US and the European Union imposed sanctions and Zimbabwe experienced a bout of hyperinflation.
"Government asked that the payments be spread out," Andrew Pascoe, president of the Commercial Farmers' Union of Zimbabwe, said in an interview in Harare on Wednesday.
"This represents the first money we have received.
"The farmers were originally to be paid half of the damages agreed to by next month, but the government requested that it be put off for 12 months," Pascoe said.
Zimbabwe's government controls 65% of Kuvimba through a 21,5% direct stake and other shareholding via State entities, including a sovereign wealth fund, pension funds and a special purpose vehicle created for farmers whose land was seized, Finance minister Mthuli Ncube said on Wednesday.
The payment was part of US$5,2 million dividend paid out to shareholders.
Under the agreement with farmers, the government proposed selling a 30-year bond on global markets to raise the money, but this has been delayed because of the effect of the coronavirus pandemic.
"The State's decision to make farmers shareholders in Kuvimba and to give others 99-year leases signalled a commitment to settle its obligations," Pascoe said.
During 2000 and just after, white-owned farms were often seized by armed gangs backed by the government and their owners driven off the land. Mugabe said the programme was necessary to restore ownership to indigenous Zimbabweans who lost their land during the colonial era.
The State-linked Kuvimba Mining House Ltd transfered US$1 million to the farmers as the government asked for a delay in paying the full US$3,5 billion compensation it had agreed to a year ago.
While the payment is a fraction of that agreed to, resolving the dispute is key to the country pulling out of the economic stagnation that the seizures, ordered by then President Robert Mugabe, triggered.
Exports plunged, relations with multilateral lenders were severed, the US and the European Union imposed sanctions and Zimbabwe experienced a bout of hyperinflation.
"Government asked that the payments be spread out," Andrew Pascoe, president of the Commercial Farmers' Union of Zimbabwe, said in an interview in Harare on Wednesday.
"This represents the first money we have received.
"The farmers were originally to be paid half of the damages agreed to by next month, but the government requested that it be put off for 12 months," Pascoe said.
Zimbabwe's government controls 65% of Kuvimba through a 21,5% direct stake and other shareholding via State entities, including a sovereign wealth fund, pension funds and a special purpose vehicle created for farmers whose land was seized, Finance minister Mthuli Ncube said on Wednesday.
The payment was part of US$5,2 million dividend paid out to shareholders.
Under the agreement with farmers, the government proposed selling a 30-year bond on global markets to raise the money, but this has been delayed because of the effect of the coronavirus pandemic.
"The State's decision to make farmers shareholders in Kuvimba and to give others 99-year leases signalled a commitment to settle its obligations," Pascoe said.
During 2000 and just after, white-owned farms were often seized by armed gangs backed by the government and their owners driven off the land. Mugabe said the programme was necessary to restore ownership to indigenous Zimbabweans who lost their land during the colonial era.
Source - Bloomberg
