Zimbabwe has offered to settle a US$3.5 billion land compensation deal over 10 years, the latest change to an agreement signed in 2020 with former White farmers ejected from properties more than two decades ago.
The southern African nation initially wanted to offer payment terms of 20 years but has since decided to speed up the process, according to Finance Minister Mthuli Ncube. The government has repeatedly missed repayment deadlines from the original pact.
“We are moving toward the quick payment of former farm owners as most of them are not young,” Ncube said on the sidelines of a meeting in the capital, Harare, to discuss the country’s debt. “We are now front-loading the payments.”
The compensation will be financed through a Treasury bond, which will have prescribed-asset status and not be liable to any form of taxation as a way to entice investors. Farmers will hold a referendum on the matter soon and the bond will be issued once outstanding details are finalised.
The impasse was one of three key issues raised by creditors as a stumbling block to resolving how to deal with the nation’s US$14 billion of liabilities. Zimbabwe President Emmerson Mnangagwa, who opened the debt talks, urged consensus on how to clear the country’s debt which “weighs heavily” on development efforts.
Zimbabwe has been cut off from accessing new lines of credit since the 2000’s by multilateral lenders including the World Bank, Paris Club, European Investment Bank and African Development Bank after it defaulted on payments. That’s led to reliance on internal resources to help meet finance needs amid shortages of basic goods, inflation of more than 200% and a currency crisis.
The government doesn’t plan to use land as a way to settle with the farmers, according to Agriculture Minister Anxious Masuka.-Bloomberg