Zimbabwe’s massive payout to former farmers: What the latest figures show

Zimbabwe has issued US$508.8 million (about R8.36 billion) in Treasury bonds to former commercial farmers as the Government continues its long-running compensation programme.

The latest figures were reported by The Herald following an update by the country’s Finance, Economic Development and Investment Promotion Deputy Minister Kudakwashe Mnangagwa in Parliament.

According to Mnangagwa, 623 claimants have received upfront cash payments, while Treasury bonds worth US$508.8 (about R8.36 billion) million have been issued to beneficiaries under the first two batches.

The first batch comprised 378 claimants who received US$3.19 million (about R52.5 million) in cash and Treasury bonds worth US$305.47 million (about R5.02 billion).

The second batch involved 245 claimants, who received US$2.09 million (about R34.4 million) in cash and bonds valued at US$203.29 million (about R3.34 billion).

A third batch of 258 claimants has received US$2.15 million (about R35.4 million) in upfront cash payments, but Treasury bonds for this group have not yet been issued.

Zimbabwe’s US$3.5 billion compensation deal

The payments are part of the Global Compensation Deed signed by the Government and representatives of former commercial farmers in 2020.

The agreement commits Zimbabwe to paying about US$3.5 billion (R57.6 billion.) to approximately 3 500 former farm owners for improvements made on compulsorily acquired land during the fast-track Land Reform Programme.

The compensation for these farmers covers improvements rather than the value of the land itself.

Meanwhile, farmers whose properties were protected under qualifying Bilateral Investment Promotion and Protection Agreements are entitled to compensation for both land and improvements.

What the Treasury bonds offer

The Treasury bonds issued to former farmers carry a fixed annual coupon rate of 2% and have a 10-year maturity period.

According to The Herald, payments associated with the bonds, including annual coupon payments, are exempt from taxation.

The Government also intends to engage the Victoria Falls Stock Exchange to list the bonds, potentially allowing beneficiaries to sell them before maturity if they require access to cash.

The bonds have also been classified as liquid assets and granted prescribed asset status, potentially making them attractive to institutional investors such as pension funds.

The latest compensation payments form part of broader Government efforts to address its outstanding obligations and support Zimbabwe’s arrears clearance and debt resolution programme.