Zimbabwe’s Government is finalizing ground work for the hunt for a financial advisor to raise the US$ 3.5 billion to compensate white farmers who lost their farms during the fast track land reform exercise executed at the turn of the century.
This follows the signing of the Global Compensation Deed between the government and the white former farmer representatives early last month.
But financing this deed remains a herculean task and government has already indicated that it will issue a 30 year debt instrument on both the local and international markets to raise the funds- a massive investment banking exercise that requires a financial advisor.
“We are working on that. That’s one of the things we will have to do,” Finance and Economic Development Minister, Mthuli Ncube told reporters yesterday late afternoon
“We will be issuing an expression of interest statement locally, in the local media as well as international media for a financial advisor wishing to express interest and then we move to the shortlisting stage and eventually we appoint an advisor to help us raise this funding from the domestic and international market,” he said.
The former white farmers have had to endure a 20 year wait before the disputed land reform exercise saga comes to a consensual finality.
Zimbabwe has promised to pay half the US$ 3.5 billion in compensation in the next 12 months with the remainder expected to be disbursed in installments.
The white farmers’ compensation has divided opinion in Zimbabwe with some critics including Zanu pf hardliners saying the move is a betrayal of the liberation struggle which was meant to reclaim the land to indigenous people while some liberals are of the view that the white farmers deserve compensation for their losses.
Others have criticized government for wanting to compensate white farmers for their past wrongs by creating debt burden for generations to come.
Whether Zimbabwe with the help of the financial advisor will succeed in raising funds within prescribed timelines, there are concerns over the country’s attractiveness to attract potential investors into the debt-instrument given a negative country perception externally.
But for President Emmerson Mnangagwa and his administration, compensation of white farmers is a show of commitment to rule of law and respect of property rights which are critical in the country’s efforts to melt the frosty relations with the West and possibly get access to their capital markets.
