Zimbabwe sets up $10 bn fund to compensate white farmers

By Janet Shoko
Posted on Wednesday, 9 March 2016 13:23

According to a document circulated to legislators, the government wants to set a $10 billion Lands Compensation Fund to settle the matter that has complicated Zimbabwe’s efforts to re-engage international financiers. The fund would be supported through levies and taxes imposed on beneficiaries of the land reform programme.

It’s not a question of government not affording it. Creditors are not after the money but the principle

“It’s a comprehensive compensation plan and could amount to $10 billion legal settlement,” one of the legislators, who has studied the proposal Eddie Cross, toldThe Standard newspaper. “It’s the first time it has been indicated and it is in conflict with the traditional policy on compensation,” he added.

In the circular, the Finance Ministry said a compensation model for “both land and improvements,” as well as for equipment acquired by the State during the land reform exercise was being worked out.

On average, occupants of the farmhouses will pay between $400 and $1,000 per annum depending on the size and condition of the houses. These new rentals are over and above the $5 per hectare farmers are paying to the government annually as land rent

President Robert Mugabe’s Zanu PF led government embarked on the controversial land reform programme after accusing the minority white farmers of refusing to share their productive farms with indigenous blacks.

The exercise destroyed Zimbabwe’s one vibrant agro-based economy, leading to perennial food shortages. The country was also isolated by the international community and foreign direct investment dried up over fears Mugabe’s government had no respect for private property.

The proposed compensation fund is likely to calm multi-lateral lenders such as the World Bank and the International Monetary Fund (IMF) who are engaged in talks with Zimbabwe to help the country rehabilitate its economy.

Domenico Fanizza who was leading an IMF delegation to asses Zimbabwe’s economy reforms told legislators the was timely.

“I will be happy if your creditors know about it and it will change things for you. It’s not a question of government not affording it. Creditors are not after the money but the principle,” he said. “We should not be having a budget with contingency liability as we have a cash budget.”

Zimbabwe says the land reform programme is over as it has allocated most of the farms earmarked for re-distribution.

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