Zimbabwe is proposing changing the terms of a $3.5 billion compensation deal signed with former white farmers two years ago, after twice missing agreed-upon payments.
The revised plan was part of Finance Minister Mthuli Ncube’s budget, presented on Thursday at the new Chinese-built Parliament building north of Harare.
Originally, farmers who were evicted from their land two decades ago should have received half the money within the first year, followed by four $437.5 million annual instalments.
‘Under the $3.5 billion Global Compensation Deed in September 2022, the government made an offer for the settlement of the GCD, which was accepted by former farm owners through a referendum’, Ncube said, referring to a new agreement.
Farmers’ groups will hold talks with Ncube to understand what he meant, according to Andrew Pascoe, president of the Commercial Farmers Union.
‘Considerable progress has been made, but we haven’t signed anything yet’, he said, denying a that referendum on the terms had been held by the group’s members.
The Treasury appointed London-based NewState Partners as transaction advisers in April last year to help raise money from international financiers.
Resolving the dispute is key to the country pulling out of the economic stagnation triggered by the seizures, ordered by then-President Robert Mugabe.
The new proposal would see $350 million being paid over four years. That would include instalments of $35 million a year for three years, and the balance in 2026 raised from selling the 12.5% stake the farmers hold in state-owned miner Kuvimba Ltd.
“The cash payments will be made in any jurisdiction in US dollars to an account of former farm owners’ choice, payable biannually in February and July,’ Ncube said.
The government will issue US dollar-denominated Treasury bonds to pay the remaining $3.15 billion.