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$2,5bn allocation for white former commercial farmers

Zimbabwe remains firmly committed to implementing the Global Compensation Agreement (GPA) with white former commercial farmers after allocating $2,5 billion to pay those in distress, Finance and Economic Development Minister Professor Mthuli Ncube revealed yesterday.

Last year, the country agreed to pay US$3,5 billion in compensation to white former commercial farmers whose farms were acquired by the Government under the Land Reform Programme, which began around 2000 to redistribute land to landless indigenous Zimbabweans.

The Government has since contracted NewState Partners as the financial advisor.

The compensation is only for improvements on the farms, and not the land itself.

However, the country is returning back land to former commercial farmers whose farms were protected by the Bilateral Investment Protection and Promotion Agreements (BIPPA).

“In fulfilment of the US$3,5 billion Global Compensation Agreement with former farm owners, Government engaged the Financial Advisor – NewState Partners who is working on a number of possible financing instruments and funding options,” said Minister Ncube while presenting the 2022 National Budget in Parliament yesterday.

These include bonds issued on the domestic financial and capital markets (both listed and unlisted), bonds issued on the international markets (both listed and unlisted), listed and unlisted equity and quasi equity type of instruments, structured financial arrangements, including the issuance of asset backed securities and off balance sheet financing arrangements using commercial guarantee.

The move is seen as critical as Zimbabwe re-engages the international community following several years of isolation.

Minister Ncube also said the Government remained committed to the engagement and re-engagement process with the international community and creditors for comprehensive arrears clearance and debt resolution.

In March 2021, the Government resumed quarterly token payments to the Multilateral Development Banks, the World Bank, the African Development Bank and the European Investment Bank.

During the third quarter of 2021, the Government also started making quarterly token payments to each of the 16 Paris Club creditors.

The minister also said Zimbabwe remained committed to its comprehensive Arrears Clearance, Debt Relief and Restructuring Strategy aimed at attaining debt sustainability post the Covid-19 pandemic.

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