Over 400 ex-settlers to get compensation

In a significant development for former farm owners, over 400 individuals have been cleared for compensation under the Global Compensation Deed, aimed at addressing losses incurred during Zimbabwe's fast-track land reform program. The government has allocated US$35 million in its 2024 National Budget to facilitate these payments, part of a broader commitment to compensate former farm owners for improvements made on the farms they once managed.

The Global Compensation Deed, signed in 2020, includes a pledge from the government to compensate former farm owners up to US$3.5 billion for improvements made to their properties. In May, it was revealed that 1,300 former farm owners agreed to receive 1% of the US$35 million principal amount to be disbursed by the end of the year. As part of this agreement, the government plans to issue US dollar-denominated Treasury bonds with maturities ranging from two to ten years, featuring a coupon rate of 2%.

During a recent meeting of sector working group co-chairpersons of the Structured Dialogue Platform on arrears clearance and debt resolution, held in Harare, it was disclosed that 444 former farm owners have been cleared for payment. The former owners lost their land during the government's land reform program aimed at rectifying colonial-era injustices.

In a statement released by the Ministry of Finance, Economic Development, and Investment Promotion, it was noted that 92 farmers had also been approved for compensation under Bilateral Investment Protection and Promotion Agreements (BIPPAs). "So far, 444 farms have been cleared for payment. The former farm owners will be compensated for improvements made," the ministry stated.

For BIPPA farmers, the government has set aside US$20 million in the 2024 budget. Compensation will cover both land and improvements made on the farms, but only for farmers from countries that had signed and ratified BIPPAs by the time of the land reform program in 2000. Eligible countries include Denmark, Switzerland, Germany, the Netherlands, and Yugoslavia.

Willard Manungo, deputy chief secretary in the Office of the President and Cabinet (OPC), highlighted ongoing initiatives to make the 99-year lease bankable and tradable. A recent study visit to Tanzania was conducted to learn from that country's experience with similar land lease documents.

The OPC co-chairs the land tenure reforms sector working group, in collaboration with Switzerland and the United Nations Development Programme (UNDP). These land tenure reforms are integral to the National Development Strategy 1, focusing on building the country's image and fostering engagement and re-engagement.

During the meeting, development partners—including representatives from the European Union, Switzerland, UNDP, and the World Bank—acknowledged the progress made by the government in relation to the debt resolution process. They emphasized the importance of maintaining dialogue and strengthening the macroeconomic framework, particularly in implementing the Staff-Monitored Programme (SMP) and accelerating agreed reforms.

The private sector was also represented by Tinashe Masiiwa of the Bankers Association of Zimbabwe, who stated that the country is progressing well in making the 99-year lease bankable and transferable. He underscored the need for policies that instill confidence in the private sector.

As of June 2024, Zimbabwe's total public debt is estimated at US$21 billion, with external debt amounting to US$12.3 billion and domestic debt at US$8.7 billion. The government has established a structured dialogue platform to facilitate discussions with all creditors and development partners, aiming to underpin the arrears clearance and debt resolution process while fostering economic governance reforms.