‘Stag­ger white farm­ers’ US$3,5bn com­pen­sa­tion’ ZNCC

. . . New land own­ers should con­trib­ute

Business Weekly (Zimbabwe) - - Front Page - Golden Sibanda

GOV­ERN­MENT, which in July signed an agree­ment to pay US$3,5 bil­lion com­pen­sa­tion to white for­mer com­mer­cial farm­ers who lost their farm­land, should re­struc­ture the debt rather than at­tempt to clear such a huge li­a­bil­ity with con­strained ca­pac­ity, Zim­babwe Na­tional Cham­ber of Com­merce (ZNCC) has warned.

ZNCC pro­posed that a tax be in­tro­duced on farm­ers that ben­e­fited from land re­pos­sessed from the for­mer com­mer­cial farm­ers, un­der the Gov­ern­ment’s fast track land re­form, to as­sist in clear­ing the huge debt.

Mak­ing its sub­mis­sions for the 2021 na­tional bud­get, ZNCC said while it ap­pre­ci­ated that pay­ing the com­pen­sa­tion was a Con­sti­tu­tional is­sue, clear­ing the debt was cur­rently not a pri­or­ity, nei­ther was it the one de­ter­ring the in­flow of for­eign cap­i­tal.

How­ever, that is in stark con­trast to the per­cep­tion of the Gov­ern­ment, which says one of the ma­jor im­ped­i­ments to For­eign Di­rect In­vest­ment (FDI) flows into Zim­babwe, is lack of in­vestor con­fi­dence, partly due to vi­o­la­tion of prop­erty rights.

This is specif­i­cally the case, the Gov­ern­ment con­tends, af­ter the pre­vi­ous ad­min­is­tra­tion failed to hon­our com­mit­ments made un­der signed and rat­i­fied Bi­lat­eral Pro­mo­tion and Pro­tec­tion of In­vest­ment Agree­ments (BIPPAs).

For­eign Af­fairs and In­ter­na­tional Trade Min­is­ter Dr Sibu­siso Moyo, says since as­sum­ing office in 2017, the Gov­ern­ment has marked a sig­nif­i­cant break from the re­cent past by clearly demon­strat­ing its

◆ com­mit­ment to hon­our its in­ter­na­tional obli­ga­tions.

He is on record say­ing that to pro­mote in­ter­na­tional trade and in­vest­ment, the Gov­ern­ment's ef­forts had re­sulted in the suc­cess­ful pas­sage through Par­lia­ment of at least six of the 18 out­stand­ing BIPPAs.

As such, and in this spirit, the Gov­ern­ment signed the US$3.5 bil­lion Global Com­pen­sa­tion Deed with rep­re­sen­ta­tives of the white for­mer farm­ers whose land was ac­quired during the fast-track Land Re­form Pro­gramme of the late 1990s and 2000s.

The US$3,5 bil­lion com­pen­sa­tion re­port­edly trans­lates to pay­ment of US$875 000 per farmer, us­ing an aver­age of 4 000 farm­ers.

In terms of the BIPPA's, Sec­tion 295 of the Con­sti­tu­tion states that in­di­vid­u­als whose land was ac­quired un­der the Land Re­form Pro­gramme, are en­ti­tled to com­pen­sa­tion, both for im­prove­ments un­der­taken upon the land as well as for the value of the land it­self.

But ZNCC, one of the largest busi­ness mem­ber or­gan­i­sa­tions, in its sub­mis­sions ahead of the pre­sen­ta­tion of 2021 na­tional bud­get due in a few weeks, said pay­ing the com­pen­sa­tion to the white for­mer farm­ers was not a pri­or­ity right now.

“The Min­istry (of Fi­nance and Eco­nomic De­vel­op­ment) should rather en­gage ex­perts for the re­struc­tur­ing of the com­pen­sa­tion agree­ment rather and not on rais­ing the fi­nance be­cause the coun­try has com­mit­ted to a high fig­ure,” ZNCC said.

The busi­ness lobby group said re­sources should come from farm­ing prof­its to hon­our obli­ga­tions of US$3,5 bil­lion agreed by the Gov­ern­ment. It said the fis­cus can­not carry the cost as it has no ca­pac­ity to hon­our the obli­ga­tion. Prior to this agree­ment with white for­mer farm­ers, Zim­babwe's ex­ter­nal debt stood at about US$10,6 bil­lion. And some ob­servers say the ex­ter­nal debt might be around USD25 bil­lion.

“The obli­ga­tion should not be a bur­den to the gen­eral tax pay­ers. There is a need to in­tro­duce a tax to be paid by farm­ers who ben­e­fited from the land re­form which will go to­wards pay­ing the US$3,5 bil­lion,” ZNCC said.

Fur­ther, ZNCC con­tends that ben­e­fi­cia­ries should pay for the farms on 25-year mort­gages, which can be used to com­pen­sate the white for­mer com­mer­cial farm­ers.

Con­trary to that view, the Gov­ern­ment says full re­spect for prop­erty rights, rule of law and en­gen­der­ing full con­fi­dence in the coun­try's le­gal sys­tem to ef­fec­tively pro­mote and pro­tect those rights was crit­i­cal in push­ing for­ward ef­fort to im­prove the ease of do­ings in Zim­babwe.

ZNCC also said no debt should ever be pro­cured with­out the in­volve­ment of the Par­lia­ment of Zim­babwe. It said the leg­is­la­ture must be held ac­count­able for the stock of debt in the econ­omy and should be availed with reg­u­lar mar­ket up­dates on the same.

Zim­babwe em­barked on an his­toric land re­form pro­gramme that eco­nom­i­cally em­pow­ered over 400 000 peo­ple and so farmer huge suc­cess has been recorded in the tobacco farm­ing sec­tor that has been gen­er­at­ing close to US$1 bil­lion an­nu­ally.

How­ever, there are calls for a sus­tained and sys­tem­atic sup­port for the farm­ing sec­tor from Gov­ern­ment and de­vel­op­ment part­ners for the farm­ing sec­tor to ef­fec­tively ben­e­fit the econ­omy through back­ward and for­ward link­ages.

IMF

The In­ter­na­tional Mon­e­tary Fund ( IMF) is fore­cast­ing a some­what less se­vere world re­ces­sion than it pre­dicted in June. said it sees the global econ­omy con­tract­ing 4,4 per­cent this year, up slightly higher from its June fore­cast for a con­trac­tion of 5,2 per­cent

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.