President Emmerson Mnangagwa’s government is struggling to raise US$1.75 billion to compensate former commercial white farmers who lost their farms under the land reform programme, Business Times reports.
Under the agreement signed at State House in July last year, Zimbabwe agreed to pay US$3.5 billion as compensation to former commercial white farmers for improvements made on the land before it was compulsorily acquired at the turn of the Millenium.
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The agreement says that the government has to pay half of the US$3.5 billion as a deposit five months from now, and the balance is to be paid in four-year instalments of US$437.5m per year.
Zimbabwe had planned to raise the amount by issuing a bond in the international capital markets to raise US$3.5 billion but this has not happened.
Speaking to Business Times, Commercial Farmers Union of Zimbabwe (CFU) president Andrew Pascoe said they haven’t received any money from the government. He said:
In terms of money, no payment has been done to date and we are not sure if the US$1.75bn can come through within the agreed time frame.
We will see how it goes in the next few months and seek the government’s audience on the way forward.
We are still negotiating with the government over a number of issues in the agreement and no lasting solution has been reached.
Economist John Robertson said it would be difficult for the government to raise the US$1.75 billion between now and the end of July this year as the country is under a huge debt burden, has a high import bill and is failing to capacitate farmers, manufacturers and miners. He said:
The raising of bonds implies a promise to repay and it is likely that the country won’t get support until we carry out reforms to restore our productive capacity. We have no way of repaying new debts when the existing debts are beyond us.
Meanwhile, the publication said it failed to get a comment from Finance minister, Mthuli Ncube, and permanent secretary, George Guvamatanga as their mobile numbers were not picked when called.
Lands, Agriculture, Water, Fisheries and Rural Settlement Minister, Anxious Masuka referred all questions to the ministry’s permanent secretary, John Basera, whose mobile phone also went unanswered.