Zimbabwe to Compensate Former Farmers R5.97 Billion in Debt Restructuring Effort

Zimbabwe is set to allocate $331 million to compensate White former farmers whose properties were taken in 2000. This move aims to encourage creditors to agree to restructure the nation’s significant debt, which has prevented it from accessing international capital markets for over 20 years.

According to African Development Bank President Akinwumi Adesina, the country has pinpointed at least 439 former landowners as “beneficiaries for financial settlement of $331 million,” during a debt conference in the capital, Harare, although no specific timeframe was provided.

Read: Zimbabwe’s economy remains resilient despite drought, says Minister Ncube

Adesina noted that Zimbabwe has earmarked $35 million from this year’s budget to initiate the payments, stating, “The debt will be settled through bonds.”

In 2022, Zimbabwean President Emmerson Mnangagwa enlisted the assistance of Adesina and former Mozambican President Joaquim Chissano to lead negotiations with creditors, which include the World Bank, the Paris Club, the European Investment Bank, and the AfDB.

Last month, Zimbabwe engaged Global Sovereign Advisory and Kepler-Karst to assist in restructuring its $21 billion debt.

Read: Zimbabwe plans to terminate tax relief for miners to enhance mineral processing

The accumulation of arrears has hindered the country from securing funds from multilateral lenders like the International Monetary Fund, forcing it to rely on the central bank for financing.

Read: Zimbabwe’s moral conscience is diminishing

“No one, regardless of their strength, can ascend a hill while carrying a backpack filled with sand,” Adesina remarked, comparing Zimbabwe’s $21 billion debt, largely composed of arrears, to a heavy burden.

Read: Reflections on a farm in Zimbabwe, 24 years later

“We all agree that we must contribute to rectifying this situation by giving a fresh start to this nation and its people,” he said. “Zimbabwe is too important for the global community to overlook.”

© 2024 Bloomberg

Stay updated with Moneyweb’s comprehensive finance and business news on WhatsApp here.