Zimbabwe initiates farm compensation payments as part of a debt restructuring effort, starting with $20 million allocated for initial payouts to affected farmers from countries with bilateral agreements. This marks a significant step towards regaining access to international capital markets and addressing financial obligations, assisted by potential IMF support.

Zimbabwe has begun making payments for farms that were confiscated as part of a compensation agreement, according to Finance Minister Mthuli Ncube. Initial disbursements, totaling funds from a $20 million allocation in the 2022 budget, were directed to Denmark, Germany, the Netherlands, Switzerland, and the former Yugoslavia for 94 seized farms. Additionally, 56 farmers from these nations, which have bilateral investment protection agreements with Zimbabwe, have also received payments.

Ncube emphasized that these payments, credited to the claimants’ preferred bank accounts, represent a crucial milestone in Zimbabwe’s efforts to restructure its debt. The country has been excluded from international capital markets since 1999 due to defaults on debts owed to various lenders including the World Bank and the African Development Bank.

The Treasury plans to make multi-year fiscal allocations until 2028, totaling $125 million to cover remaining compensation balances. The ambassadors from Germany, the Netherlands, and Switzerland, based in Harare, showed support for the initiative, noting that “several affected investors have received initial payouts,” which signals a growing sense of resolution among them.

An International Monetary Fund (IMF) team is currently assessing Zimbabwe’s financial situation to determine the feasibility of establishing a “staff-monitored program,” which is essential for advancing the country’s debt restructuring process. This step is expected to enhance Zimbabwe’s financial stability and reintegration into the global economy.

In summary, Zimbabwe has commenced compensation payments for seized farms to affected farmers from nations with investment protection agreements. This initiative is part of a broader strategy to enhance the country’s standing in international capital markets and signal its commitment to addressing outstanding debts. The IMF’s involvement may further facilitate the necessary reforms for financial recovery.

Original Source: www.zawya.com