KEY POINTS
- Zimbabwe allocates $331 million for land reform compensation.
- The government set aside $35 million in the 2024 budget.
- Compensation plan aids debt restructuring and economic recovery.
Zimbabwe will pay R6 billion ($331 million) to white former farmers whose land was seized during the controversial 2000 land reforms, a move by Zimbabwe’s government to address past grievances and unlock access to the international capital market.
African Development Bank (AfDB) President Akinwumi Adesina announced the compensation plan Monday at a debt conference with international creditors in Harare.
According to News24, Adesina said the government has identified 439 beneficiaries and set aside $35 million in its 2024 budget to begin payments. The remaining funds will be issued through bonds.
Debt restructuring and economic recovery
The compensation initiative is part of Zimbabwe’s broader effort to restructure its $21 billion debt, much of which is in arrears.
President Emmerson Mnangagwa enlisted Adesina and former Mozambican President Joaquim Chissano to mediate with creditors, including the World Bank, the International Monetary Fund (IMF), and the European Investment Bank.
“No one, no matter how strong, can run up a hill with a backpack of sand on their back,” Adesina said, likening Zimbabwe’s debt burden to a major obstacle to its economic recovery.
Zimbabwe has been locked out of international capital markets for more than two decades, relying on its central bank to fund public spending.
The government recently hired Global Sovereign Advisory and Kepler-Karst to assist in renegotiating its debt and re-engaging with multilateral lenders.
Adesina emphasized that resolving the compensation issue is critical for Zimbabwe’s future. “We can all agree that we must play our part to correct this anomaly by giving a new lease of life to this nation and its people,” he said.
A critical step forward
The compensation plan signals a commitment to economic reform and accountability. Adesina underscored Zimbabwe’s strategic importance, saying, “Zimbabwe is too critical for the world to ignore.”
If successfully implemented, the initiative could improve Zimbabwe’s credibility with international creditors and pave the way for much-needed financial support to stabilize the economy.
