eBusiness Weekly
Andrew Pascoe
President Robert Mugabe’s land reforms in the early 2000s robbed thousands of Zimbabwean farmers of their land, and of their livelihoods. What was presented as an attempt to right the wrongs of colonisation, turned into a politicised, corrupt land grab.
It has taken twenty years for the injustices and illegalities to have been recognised. On July 29, 2020, Zimbabwe finally made the headlines for the right reasons. The Government, led by President Mnangagwa, and the white farmers, represented by the Commercial Farmers Union (CFU), signed a compensation deal worth US$3,5 billion, described by President Mnangagwa as a “new beginning of the land discourse in Zimbabwe”.
The deal has set many a tongue wagging. It is thus crucial to lay out all the facts on the table. Most importantly perhaps is the democratic nature of this agreement. The CFU conducted a referendum of its members, 60 percent of whom today live outside Zimbabwe.
Out of 2 896 votes on the day, there were 2 759 “Yes” votes, and only 137 “No” votes. Votes have continued to trickle in since the cut-off, and as of the 13th of August, 95 percent of the 3 191 votes were cast in favour.
The agreement itself is a result of long and tough negotiations, based on the Zimbabwean constitution which provides for the payment of compensation for improvements on “compulsorily acquired agricultural lands”.
A database was thus created, known as the ‘Valcon Database’ which has 4 730 farms registered, representing almost 90 percent of all farms affected by Mugabe’s Fast Track Land Reform Programme. The database calculated the value of all registered farms in order to arrive at a fair figure of compensation.
In this case, the valuation of permanent improvements was carried out in accordance with the requirements of the Zimbabwe Land Acquisition Act. As per the constitution, the land value was to be excluded, and in accordance with International Valuation Standards, the Depreciated Replacement Cost (DRC) method was used to establish the value of improvements was used. None of this was done alone. The replacement costs per unit were agreed with the Government after consultations with reputable contractors, which took over a year to obtain and agree in full.
The figure of $5,2 billion was established as being the collective valuation of improvements to the farms as a whole. Considering Zimbabwe’s economic difficulties, this figure was considered to be unaffordable, and after lengthy negotiation, the Government offered a figure of US$3,5 billion, which was put to farmers for their acceptance or rejection.
In light of the economic climate, it was clear that the payment would not be in one lump sum.
The key was to find a payment schedule that provided swift relief to farmers, many of whom have waited two decades for compensation, while not further increasing the country’s debt burden. The terms of the deal, a 50 percent down-payment within one year of signing, with the balance to be paid over the next four years, represent a fair compromise. In addition, the Government has committed to paying the full sum within 12 months should the funds successfully be mobilised within that time.
There are of course those that criticise the agreement. For some, the compensation figure and the payment schedule are not what they hoped for. For others, the very concept of an agreement based on improvements to the land, and not its value, is a non-starter.
Yet we urge those around the world to listen to the voice of those directly affected by the issue, who almost unanimously voted in favour. We are not blind to the limitations, but we recognise that for the first time in two decades, there is a Zimbabwean government prepared to recognise our plight, to treat us with respect and dignity and to compensate us for our suffering.
Andrew Pascoe is President of the Commercial Farmers’ Union in Zimbabwe. — CNBC Africa.
