FINANCE minister Mthuli Ncube says the government is waiting for a response from white former commercial farmers, who were displaced during the land reform, on a proposed compensation framework.
The government has proposed floating a debt instrument to raise the US$3,5 billion needed to pay off the former farmers for improvements made on the land.
Ncube stressed that the government was treating the issue as a matter of urgency.
Finance Minister Mthuli Ncube
“We had initially converged on a mechanism to pay the farmers over a long period of 20 years. The leadership (of the farmers) came forward and pointed out that many of the intended beneficiaries were getting advanced in age.
“So, we worked together… to cut down that debt instrument to 10 years. But at the end of the day, we want them to get paid faster than that. Its advantageous, paying faster will also allow us to clear the rest of the debt arrears faster because the two issues are linked,” Ncube told the media recently.
He said the government had placed a number of incentives around the debt instrument to make it attractive to the market.
“We have given it preferred asset status, which means pension funds can invest in it. We have also accorded it liquid asset status for easy tradability. We have tried very hard to package a lot of incentives.
“The farmers are going through their own internal processes, which involve a referendum. They have to all agree and feel that they are comfortable with this instrument. But I am pleased we are at this juncture. We have made a lot of progress,” Ncube said.
“We haven’t stopped paying normal interim relief payments. Every year, I set aside an amount in the budget, and every month we allocate something to the farmers.”
This comes after the hosting of the Second Structured Dialogue Platform Meeting — a forum for discussion between the government of Zimbabwe and its development partners and creditors on the country’s arrears clearance and debt resolution process.
Champion for arrears clearance and debt resolution for Zimbabwe and president of the African Development Bank, Akinwumi Adesina, said the compensation was critical for both the debt process and the lifting of sanctions against Zimbabwe by, in particular, the United States of America.
“And critically, the central pin is the full compensation of the commercial farmers under the Global Compensation Deed and the full implementation of the Bilateral Investment Promotion Protection Agreement, and the implementation of the laws that assure long-term security of titles to land,” Adesina said.
“International banking has almost dried up, with 102 correspondence banking relations lost in the past decade. Today, 90 percent of the economy is now informal. Zimbabwe’s once thriving contribution as the nerve centre of the Sadc region has been broken, lowering regional trade and investments,” he added.
“The people of Zimbabwe have suffered enough. The young people of Zimbabwe deserve to have their once-prosperous country back. They cannot continue to suffer for a past they did not create.”
Adesina said the sanctions had led to arrears and debt accumulation over the years. The total consolidated debt of Zimbabwe stands at US$17,5 billion.
“Debt owed to international creditors stands at US$14,04 billion, while domestic debt stands at US$3,4 billion. Debt owed to bilateral creditors is estimated at US$5,75 billion, while debt to multilateral creditors is estimated at US$2,5 billion.
“The country is in arrears for servicing its debt, with arrears to multilateral development banks, including the African Development Bank, the World Bank, and the European Investment Bank. While token payments are being made to service the debt, it is now time for a comprehensive arrears’ clearance, debt resolution and debt restructuring for Zimbabwe,” he said.
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