The African Development Bank (AfDB) plans to aid Zimbabwe in raising $3.5 billion to compensate white farmers evicted from their land more than two decades ago, as a requirement for the nation’s largest creditors to accept a proposed debt-clearance program.
Akinwumi Adesina, the bank’s president, stated that they are working with the government to formulate a financial instrument that could leverage the capital markets to fund the compensation without adding debt to Zimbabwe, according to News24. He told reporters in the capital, Harare, on Monday:
We are currently working with the minister of finance and the government of Zimbabwe to develop a financial instrument that could potentially be useful. It will help leverage the capital markets to fund the compensation, without adding debt to Zimbabwe.
The government has missed repayment deadlines for an accord signed in 2020 to compensate white farmers, and discussions with creditors are ongoing after elections later this year.
While it initially envisioned paying the farmers over 20 years, that period has now been reduced to a decade, according to Finance Minister Mthuli Ncube.
The southern African nation concluded a fourth round of talks with creditors on Monday on the clearance of $17 billion it owes to multilateral lenders, including the World Bank and Paris Club.
More discussions are planned after elections scheduled for later this year.
Some context:
Zimbabwe implemented a fast-track land reform program in the early 2000s that saw the seizure of land from white farmers and its redistribution to black Zimbabweans. The program was marred by violence and accusations of corruption and mismanagement, with many white farmers evicted without compensation.
In 2020, the government signed an agreement to compensate affected white farmers with $3.5 billion over 10 years, although the compensation process has been slow and missed repayment deadlines. The compensation issue is a condition for Zimbabwe’s largest creditors to accept a proposed debt-clearance program.