Settling land compensation issue vital for Zim’s economy

IN his inaugural address, the new President of Zimbabwe, Emmerson Mnangagwa, confirmed that land reform was both historically necessary and irreversible.
He also made a commitment to compensate farmers who were forced off their land during the fast track land reform programme of the 2000s.

Guest column: Ian Scoones

Many international commentators read this as a sign of a more inclusive stance that could benefit economic recovery. Indeed, the recent reinstatement of a few evicted white farmers is perhaps an indication that things are changing.

Mnangagwa has no option, but to tackle land reform if he’s serious about getting Zimbabwe’s economy back on track. This is because agriculture continues to play a significant role.

Zimbabwe’s major land reform, starting in the year 2000, resulted in around 6 000 farms owned by about 4 500 farmers and companies being taken over. Former owners, most of them white commercial farmers, were evicted, sometimes violently.

Today, around 145 000 households occupy 4,1 million hectares under smallholder resettlement schemes. Another 3,5 million hectares are used by about 23 000 medium-scale farmers.

One of the new government’s major policy priorities has to be to get agriculture moving as a motor of growth. The long-running issue of outstanding compensation payments has meant that international donors and financiers have not engaged with land reform areas, missing out on supporting major development opportunities.

Agriculture remains a mainstay of Zimbabwe’s economy. People on the resettlement farms are producing significant quantities of food and other agricultural products. For example, in the last season, over half of the 2,2 million tonnes of maize produced in the country, as well as 60% of total tobacco output worth nearly $350 million, came from land reform areas. These numbers make it clear how vital they are to Zimbabwe’s struggling economy.

Fixing the system

Former commercial farmers held land under freehold title. In some cases bilateral investment agreements, mostly with European countries also governed ownership. Yet, as part of the reform, land was expropriated by the State and allocated to new users. Initially, this was done without regard to these rights.

The lack of redress and the ongoing contestation over ownership of land has caused uncertainty. This in turn, has affected growth and investment. Many western countries have refused to undertake work in these areas linked to a wider sanctions regime.

Resolving the compensation question is vital for seeking a way forward for Zimbabwe’s agricultural sector.

Of course, offering compensation is not a new policy. Compensation for “improvements” on the land has been on offer for years. It was reconfirmed by the 2013 Constitution, negotiated by all political parties.

To date, around half of all farms acquired during land reform have been valued by the government. In parallel, others have been valued by private surveyors and ValCon, an organisation backed by former large-scale farmers.

So far, around 250 compensation settlements have been reached, amounting to a payment of around $100 million.

For farms where land was acquired under bilateral investment treaties, compensation for both land and improvements must be paid, adding to the costs.

What’s been missing has been the capacity to undertake valuations of the remaining farms for the funds to pay compensation, as well as the political will to see it through.

This may now have changed under Mnangagwa. A commitment has been made to a process of auditing, valuing and paying compensation, linked in turn to the issuing of 99-year leases and permits to use the land.

Who will pay and how?

The total compensation bill is likely to run into several billion dollars. Who will pay — and how — are the big questions.

A mix of payments across different liabilities will be required.

There will be private components such as equipment that a new farmer is using, that will have to be paid off by larger-scale farmers. This payment can be done over many years through mortgaging arrangements, with upfront payments by the State to former owners.

For smallholder farmers, the “improvements” designed for large-scale farming have been less useful. And their ability to pay is much less. Here, State or aid funding of compensation will be required.

Other public assets — such as a dam, a road, a building now being used as school or as an extension workers’ house — are more appropriately paid off by the State, or as part of a donor-financed or debt-rescheduling scheme.

Quick resolution is essential

Nearly 18 years after the land reform, most evicted farmers want a quick, pragmatic solution. This has dragged on for too long. Former white farmers are ageing and are in urgent need of pension support. Others have moved on to different businesses or left the country. This is about acknowledgement, reconciliation and justice.

In a period when there have been currency changes, hyperinflation and dramatic shifts in the economy, valuation will always be an approximate science.
While some will continue to contest the land reform in whatever court or tribunal that will hear them, most want resolution — and soon.

Resolving the compensation issue is essential, not only to provide redress for those who lost their farms, but also to reduce uncertainty, encourage investment and unlock potential for growth and development.

Mnangagwa’s commitment is a good sign. But it now needs to be seen through, and urgently.

Ian Scoones receives funding from the UK Economic and Social Research Council through the ESRC STEPS Centre at Sussex

2 Comments

  1. Most known political heavyweights who are at the forefront of the Zim is open for business manra did not only grab the land but also the cattle, tracters, crops and other valuables. Now they are going to countries of those same people they robbed looking for investments. Land grabbing is still ongoing. What is only left are land fights amongst us blacks because tax payers are paying for the land so there is need for equitable distribution. Eyen Smith lost his farm so there is nothing which can stop Mugabe or Ed to also loose theirs. The only way to benefit from land is to utilise it instead of hoarding land because its for Zimbabweans and not for elite. Ugly and violend land fights are impending. Ignore that at your own peril.

  2. The only thing thecreporter got right is that itbis vital but he neds to do some research into the problem as Zimbabwe has no obligation to pay compensation to anyone as the land was given to them by the British Government at independence and the UK agreed to pay compensation by farmers. Zimbabwe cannot pay UK’S debts as we do not hsve the funds, its that simple.
    The history.
    1923 Rhodesia PAID Britain for all agricultural land through a fund established in UK for that purpose at 3% interest.
    1980 At Lancaster house an agreement was made by Britain to give all agricultural land to the Zimbabwe government and as they need time to raise compensation there was a 10 year grace period to raise compensation funds and the US agreed to pay 50%.Thus all farm were compulsory purchased by Britain without reference to the farmers and were made 10 year leasehold to the Zimbabwe governmebt.
    A compensation fund was established by the British government but halted because thev government allocated farms to individuals and MP’s in the UK government wanted to split farms and give land to the rural poor closing down the agricultural sector and large scale farming totally.
    In the late 90ties the legal fraternity organised a constitution debate as the Chief Justice was under investigation by anti-corruption and they wished to remove presidential control to hire and fire judges which would mean he could be prosecuted.
    John Deary explained to all after the adoption, the whole objective was to remove presidential powers from the judiciary and in order to gain agreement we had to put in a carrot of fast tracking the land reform program. In the event farmers funded a no vote government added the land reform agreed to the constitution and fast tracking started. Lawyers made a fortune giving advice and there was one lot of advice from chambers which was circulated and the head of chambers De Bourbon became legal adviser to the CFU. What CFU have failed to explain to anyone is how they control all the farms in Zimbabwe simply because farmers are members of their organisation.

    When fast tracking commenced in 2000 a new compensation fund was established and notice given to the president of the CFU and Tsvangirai however they both were not interested turning political and instead asking the British government to engage western allies and put pressure on the Zimbabwe government to change the government. both CFU and JAG were funded presumably conditional that no claims were made. The CFU promoted compensation from the Zimbabwe government and suggested improvements only presumably it could be funded by the west through the back door as a cover up exonerating the west. CFU threatened farmers who wanted to claim from the UK compensation fund with being blacklisted if any funding came to the CFU. Improvements only would be a reduction of 80% in compensation to the west.
    Spurious cases were promoted to keep farmers quiet in countries with no jurisdiction over Zimbabwe and even a case went to SADC when international law states all legal remedies should be exhausted in the country where the land is situate first, before a higher court may be approached All propaganda to support less compensation from the west.
    What is needed is a local case against the compensation fund in the UK in our Courts. How may we not succeed when the British Parliament formed such a fund twice.
    Also as many ex farmers want to remain in Zimbabwe it would be an invisible export clearing Zimbabwe’s name and bringing conservatively 9 billion dollars into the country.
    Zimbabwe does not have the funds to bail out the west and clearly should not pay compensation on Britain’s behalf.

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