Oliver Kazunga, Senior Business Journalist
The GOVERNMENT has started mobilizing resources under the US $ 3.5 billion Global Compensation Agreement (GCA) between the state and former white commercial farmers with the recent appointment of financial advisers who are supposed to catalyze the process.
The Treasury noted delays in the process of appointing financial advisers, which, coupled with the Covid-19 pandemic, have slowed the resource mobilization process since the agreement was signed last year.
As a result, the parties to the Comprehensive Compensation Act have now agreed to extend the period of the first payment from this month to July of next year.
The Second Republic led by President Mnangagwa is committed to resolving the dispute with farmers over losses involving improvements to agricultural land acquired as a result of the successful land reform program more than two decades ago.
Finance and Economic Development Minister Professor Mthuli Ncube, who is also the Chairman of the Joint Resource Mobilization Committee (JRMC), announced the latest developments in a statement yesterday.
In accordance with the Law on Public Procurement and Disposal of Public Property (Chapter 22:23), the minister said that the procurement of financial advisory services for the resource mobilization process began with the publication, by the intermediary of the Treasury, of an international call for expressions of interest last year. in September.
“The procurement process went through several stages that took longer than initially expected. Nonetheless, we are happy to announce that the process is now complete and that the contract with the financial advisers – Newstate Partners, was signed on April 21, 2021, ”said Professor Ncube.
“Financial advisors have already started working with JRMC to support their fundraising. The parties signed an amendment to the Comprehensive Compensation Act on May 7, 2021 to give legal effect to their agreement, ”said Professor Ncube.
The government secured US $ 250 million last December for the compensation process through the donation of a stake of equal value in a mining asset – Kuvimba Mining House, a special purpose vehicle specially created to raise funds for the GCA. The first dividend from this long-standing stake was paid last month.
An amount of $ 1 million was declared at the end of last year in favor of the former farm owners compensation fund and this amount will be applied to the partial settlement of the overall compensation amount agreed, the professor said. Ncube.
Thereafter, he said, dividends will be paid quarterly and applied in the same way.
In collaboration with Newstate Partners, the minister said, a number of possible financing instruments and financing options were already under consideration.
“These include, but are not limited to: bonds issued nationally (both listed and unlisted), bonds issued on international markets (both listed and unlisted), instruments such as listed and unlisted equities and quasi-equities, structured financial arrangements, including issuance of asset-backed securities and off-balance sheet financing using commercial guarantees, ”he added.
The government believes that the structure will increase and complement the resources already made available. Professor Ncube said the Treasury funded the creation of a dedicated JRMC project office with a full secretariat. The project office also benefits from technical assistance from international cooperation partners.
“The office is now operational and has received momentum for the joint resource mobilization process,” he said.
In this year’s national budget, the government committed $ 2 billion to compensate former white commercial farmers and the resources are paid to struggling former commercial farmers as interim relief payments.
According to observers, the government’s gesture is part of its dynamic of re-engagement and reconnection with traditional allies and addresses its respect for the record of property rights.
As part of the Accelerated Land Reform Program, the government compulsorily acquired farmland from white farmers to resettle landless blacks. This was intended to correct the imbalances in colonial land ownership that were in favor of whites and to economically empower the majority blacks in the country.
Consequently, Zimbabwe was hit by the illegal economic embargo imposed by Britain and its allies. During the two decades that the economic embargo was in place, Zimbabwe’s economy experienced a free fall that peaked with record inflation of over 500 billion percent, according to the International Monetary Fund (IMF).
The country has not recovered from the sanctions and the ensuing economic hardship, which also led to the collapse of industry and agriculture, degeneration of infrastructure and unemployment. – @okazunga