Harare (New Ziana) – The government said on Friday it sees the US$3.5 billion dollar compensation agreement it signed with former white commercial farmers this week as a boost for the country’s re-engagement agenda and expects it to yield improved relations with Western countries.
The Zimbabwe government and the former farmers signed the historic agreement on Wednesday this week under which compensation will be paid for improvements made on farms that were acquired under the land reform programme.
Under its agrarian reforms over the last two decades, the government acquired excess farmland compulsorily from white farmers who owned the
bulk of the country’s arable land to resettle landless blacks.
This deliberate empowerment policy drew the ire of Western powers led by Britain who retaliated with harsh economic sanctions on Zimbabwe.
As a way to ease the hostilities, the Zimbabwe government embarked on a re-engagement drive whose fruits so far include this landmark compensation deal.
The compensation is being done in line with chapter 16 of the constitution and is only limited to improvements made on the farms and not the land itself.
Foreign Affairs and International Trade Minister Sibusiso Moyo said the agreement, while bringing closure to the land reform programme, was a huge stride in the re-engagement agenda.
“Two decades of foreign sanctions on Zimbabwe have come as a direct result from the conflict on land. The agreement reached for compensation in terms of the constitution is in the national interest to aid the removal of these sanctions,” he tweeted.
“Through this landmark deal, we hope that not only those who are directly affected will benefit but all Zimbabweans will have a better quality of life thanks to increased economic prosperity.”
Details of how much money each farmer would get are yet to be revealed, but the payments will cover the value of improvements, biological assets and land clearing costs.
The compensation will be payable in instalments of a 50 percent deposit payable 12 months after the signing of the agreement and one quarter of the balance in each subsequent year.
Full payment is expected to be made over five years.
The government expects to source the compensation funds by issuing a long term debt instrument of 30 year maturity in international capital markets.