US Dollar Bonds Issued as Zimbabwe Addresses Long-Standing Land Disputes
Image source: Future Agricultures
Zimbabwe has issued treasury bonds valued at $308 million and made partial cash payments to White farmers who were displaced from their lands 25 years ago during a state-driven land reform initiative. This marks a crucial step toward addressing the unresolved issues stemming from Zimbabwe’s contentious land redistribution policies.
These payments represent the first phase of the “Global Compensation Deed,” an agreement established in 2020 between the government and the dispossessed farm owners. Under this agreement, Zimbabwe pledged to provide $3.5 billion as compensation for infrastructure and improvements made on the seized farmland. The Land Compensation Committee approved payments to 740 former farm owners, with the initial 378 beneficiaries receiving 1% of the total compensation amounting to $311 million in late March, in addition to treasury bonds, according to Finance Minister Mthuli Ncube.
Beyond the cash payments, the remainder is being distributed through US dollar-denominated treasury bonds, carrying a 2% coupon and maturing in periods ranging from two to ten years. Ncube clarified that these bonds, issued last week, are tradable and can be held by various market participants, including pension funds, before they reach maturity. Andrew Pascoe, Chairperson of the Compensation Steering Committee and former President of the Commercial Farmers’ Union, confirmed that the payments were received, noting that the former farm owners were paid in dollars on March 24.
This initiative is part of Zimbabwe’s broader effort to resolve the longstanding tensions ignited by former President Robert Mugabe’s land reform measures. Back in 2000, Mugabe encouraged liberation war veterans to forcibly remove farmers and their workers from their land, a politically motivated move aimed at gaining electoral support during a tightly contested vote. By 2002, this campaign had resulted in the deaths of at least seven White farmers and numerous workers, according to Human Rights Watch. The upheaval prompted sanctions from the US, UK, and European Union, further isolating Zimbabwe’s economy and straining its diplomatic relations with Western nations.
Compounding these challenges is Zimbabwe’s history of debt defaults. The nation has been excluded from international capital markets since 1999 after defaulting on loans from institutions such as the World Bank, Paris Club, and African Development Bank. In a bid to rebuild credibility with foreign creditors, Zimbabwe has initiated compensation payments to five nations—Denmark, Germany, Netherlands, Switzerland, and the former Yugoslavia—as well as 56 foreign nationals whose farms were confiscated despite bilateral protection agreements. This compensation process is seen as a crucial measure in Zimbabwe’s efforts to restructure its debt, which amounts to $21 billion, with 57% owed to external lenders.
The compensation plan is also integral to Zimbabwe’s strategy to re-establish relations with international financiers and clear its arrears. Finance Minister Mthuli Ncube stressed the importance of resolving these debts as a prerequisite for accessing fresh funding from global institutions like the World Bank and African Development Bank. The government’s adherence to the Global Compensation Deed is regarded as a key step in restoring economic stability and fostering reconciliation.
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