Zimbabwe says it does not have funds to pay former white commercial farmers displaced from their land under the country’s chaotic agrarian reform programme as President Emmerson Mnangagwa’s government battles to contain excessive expenditure on input schemes to support productivity on farms that are now in the hands of blacks.
Compensating the former commercial farmers is seen as key to unlocking fresh financing for the country as well as restoring relations with the international community.
Mnangagwa has pledged to compensate the farmers, but the Treasury says it does not presently have funds to commit to this exercise.
“While work on the extent of government’s obligations is still to be finalised, the resources required to compensate and put closure to this important issue (compensation of displaced commercial farmers) is obviously beyond the capacity of budget to finance,” the Treasury said in its investment and expenditure plan for 2019 booklet released this month.
Finance Minister Mthuli Ncube said in the 2019 budget statement last month the government was still working on determining the amount it had to pay to the displaced farmers.
Treasury has emphasised that there is no room to cater for the compensation of the commercial farmers through budget provisions.
Zimbabwe has other pressing financial obligations such as settling debt and arrears owed to the World Bank and African Development Bank among other international lenders.
Ncube is also reviewing the funding mechanisms for input support schemes and wants the private sector to be more involved in funding agriculture. His concerns come after “expenditure on agriculture reached $1.1billion as at August 2018” against a budget target of $401million.
Ncube, who has been criticised for austerity measures to jump-start Zimbabwe’s economy, said he wanted banks and contractors to fund farmers. He said last week that the government would address concerns raised by banking institutions over farm leases given to the new black farmers.
“We will address the concerns that banks have brought forward about the 99-year land leases,” he said.
The government is now “mobilising strategies and finance mechanisms are being pursued” and these include the setting up of a land bank.
Mnangagwa has said there was no going back on the land takeover issue in Zimbabwe despite the controversy that dogged the initiative and how it cut agricultural productivity, leaving the once breadbasket of the region as a net importer of grains such as wheat and maize.