President Emmerson Mnangagwa of Zimbabwe, left, at the signing of compensation to White farmers

The Zimbabwean government and former white commercial farmers have signed a 3.5 billion U.S. dollars compensation agreement for the farmers.

The money, which will be borrowed by the Zimbabwean government, is meant for improvements made by the white farmers on their farms that were acquired by government under the land reform program.

President Emmerson Mnangagwa, at the signing ceremony in Harare, said the agreement was a significant step towards bringing closure to the land reform program.

Under the program which started in the early 2000s, government compulsorily acquired excess farm land from white farmers to resettle landless blacks.

Government said this was meant to redress colonial land ownership imbalances that were skewed in favor of whites, and also to economically empower the country’s majority blacks.

“This momentous event is historic in many respects, it brings both closure and a new beginning in the history of the land discourse in Zimbabwe,” Mnangagwa said.

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He said the process which had culminated in the signing of the agreement is historic as it is a re-affirmation of the irreversibility of land reform program as well as a symbol of the country’s commitment to constitutionalism, respect of the rule of law and property rights.

Finance and Economic Development Minister Mthuli Ncube and acting Agriculture Minister Oppah Muchinguri-Kashiri signed on behalf of the Zimbabwean government, while representatives of the Commercial Farmers Union (CFU), the Southern African Commercial Farmers Alliance and a foreign consortium, Valcon, which undertook valuations, also penned the agreement.

At least 2,801 former commercial farmers acceded to the compensation out of 2,963 that were approached with the compensation offer.

Mnangagwa said the compensation was being done in line with the country’s constitution, adding that the agreement was only limited to improvements made on the farms and not the land itself.

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“My administration reaffirms that the government of Zimbabwe does not have any obligation for compensation for acquired land. Thus, our entering into the agreement does not create any liability whatsoever,” he said.

Details of how much money each farmer would get were not immediately available, but the payments would cover the value of improvements, biological assets and land clearing costs.

“The global compensation figure will be payable in installments as follows: a 50 percent deposit payable 12 months after signature of the agreement and one quarter of the balance in each subsequent year so that full payment is made over five years,” reads part of the agreement.

According to the agreement, the full amount of the global compensation figure may, however, be paid within 12 months of signature of the agreement if sufficient funds for the purpose are mobilized within this period.

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Mobilization of funding is expected to commence soon while a compensation committee would verify all claims before payment is made.

The Zimbabwean government is expected to borrow by issuing a long-term debt instrument of 30-year maturity in international capital markets in compliance with the country’s debt management strategy, according to the agreement.

“Individual former farm owners may, at their own free will, elect not to accede to the Global Compensation Deed in which case they will not be bound by it,” the agreement says.

“As Zimbabweans, we have chosen to resolve this long-outstanding issue,” said Andrew Pascoe, head of the CFU.