via Zimbabwe’s Evicted White Farmers Seek World Bank Backed Bonds - Businessweek 23 July 2014 by Brian Latham
Commercial farmers in Zimbabwe whose holdings were seized in land invasions backed by President Robert Mugabe’s administration say the World Bank is considering underwriting the settlement of their claims with government bonds.
The World Bank is advising the government on improving land reform and compensation bonds have been used in other countries, the office of its country manager in Zimbabwe, Camille Nuamah, said in a July 18 response to questions. Zimbabwean Agriculture Minister Joseph Made wasn’t available to discuss compensation, an aide who declined to be identified said when his office was called.
About 3,000 mainly white farmers were dispossessed of their properties in a land reform program that began ahead of elections in 2000 and led to the collapse of exports ranging from tobacco to corn, causing famines and an almost decade-long recession. At least 18 farmers and farm workers were killed in the invasions in 2000 and 2001, while about 300,000 farm workers have lost their jobs, according to the Harare-based Commercial Farmers Union.
“The bonds should be issued by the government of Zimbabwe but underwritten by the Multilateral Investment Guarantee Agency under the World Bank,” Ben Gilpin, an executive at the CFU, said in an interview on June 9.
The government has yet to respond to the proposal, said Gilpin, who heads the union’s Land Evaluation Committee, which represents almost all of the dispossessed farmers. The CFU wants the bonds to be based on the value of individual farms.
“The quality of land administration is only one of a wide range of policy issues that are considered” before the World Bank decides on funding for the government, the lender said in the e-mail. “Compensation bonds is only one of a variety of methods that have been used in other countries which have experienced large scale land reforms.”
Zimbabwe is trying to repair relations with global lenders and the International Monetary Fund will re-open its country office in the capital, Harare, this year after closing it in 2004. The southern African nation has total debts of about $10 billion and is in arrears to the World Bank for about $828 million, Finance Minister Patrick Chinamasa told parliament July 3.
The country is trying to stoke growth in a stalling economy threatened by deflation and liquidity constraints that have left government struggling to pay civil servants.
Mugabe, who has led the country since independence in 1980, justified the seizures by saying the U.K, its former colonial power, failed to honor a 1979 agreement that would have compelled Britain to fund land reform.
Black Zimbabweans were disenfranchised of land after white settlers began claiming farms in the country, formerly known as Rhodesia, in 1890. The Land Tenure Act of 1969 gave whites, who made up less than two percent of the population, 39.1 percent of the country’s area while blacks were confined to 43.8 percent of mostly crowded land, maps in the CFU headquarters show. Zimbabwe’s Ministry of Lands says whites owned 45 percent of the country’s land in 1980.
Attempts by farmers to challenge evictions through Zimbabwe’s courts failed after the government issued notices to acquire individual farms beginning in 2000.
A subsequent attempt to challenge Zimbabwe through the regional Southern African Development Community Tribunal, while partially successful, was ignored by the government.
The evaluation committee has used satellite imagery to calculate the value of about 85 percent of all farms seized by the government, Gilpin said.
“The process is designed to make it affordable for government to pay compensation and bring closure to the issue for once and for all,” said Gilpin. “It’d be a way for government to facilitate re-engagement with the world and bring some dignity to the now elderly farmers who lost everything.”
The proposal has the support of the World Bank and some donor nations, he said.
About 20 former farmers have received “some” compensation from Zimbabwe’s Ministry of Lands and Rural Resettlement, Gilpin said.
“It’s a protracted process taking up to five years, and farmers must prove that they paid retrenchment packages to their labor and then hand over their title deeds before anything can progress,” he said. He wouldn’t comment on amounts.
When the seizures began Zimbabwe was the world’s second-biggest tobacco exporter, Africa’s second-largest corn exporter and had thriving horticulture, paprika and rose export industries.
While tobacco production is recovering the country now regularly imports corn and its other agricultural industries have mostly been decimated with some farmers moving elsewhere in Africa or to Australia and New Zealand.