Zimbabwe agrees to pay $3.5bn to white farmers but why?

In Harare on Wednesday, the government of Zimbabwe signed an agreement with the body that represents the interests of many of the country’s white farmers for a compensation package of $3.5 billion.

The Commercial Farmers Union of Zimbabwe will be paid the amount over the course of next six years with the Zimbabwean government expected to settle 50% of the sum within the next 12 months.

Andrew Pascoe, president of the Union, was pleased with the package, calling it “nothing short of a miracle”.

“After almost 20 years of conflict over the land issue, representatives of farmers who lost their land through the fast track reform program and representatives of government have been able to come together to see a resolution of this conflict,” said Pascoe.

On his part, Zimbabwe President Emmerson Mnangagwa praised “a new beginning in the history of the land discourse in our country Zimbabwe.” But he was careful to point out that the compensation package is not for the lands that were retrieved from the early 2000s but for the infrastructure that was owned by the farmers.

“With regards to the land compensation agreement signed today, my administration reaffirms that the government of Zimbabwe does not have any obligation for compensation for acquired land. The constitution bids us to compensate [for] all the improvements on land,”  Mnangagwa explained.

It is reasonable to read Mnangagwa’s explanation as a nod to a section within the ruling Zanu-PF and the majority black population who may not entirely be on board with compensating white farmers.

Last year, a veteran politician and a senior member of the Zanu-PF Politburo, Douglas Mahiya, opposed any form of compensation, saying in an interview: “But we are saying that we compensate [them] for their sweat. And when that happens, then the international world must accept Zimbabwe in the global family again economically and politically.”

Mnangagwa’s presidency has been departing from the unrelenting black nationalism of former president Robert Mugabe. Mnangagwa, since 2017, has spoken of the need to resuscitate a very ill Zimbabwean economy, a venture he has connected abundantly with racial politics and property ownership in the country.

Mugabe’s expropriation of lands owned by white farmers accelerated the decline of a fragile economy. While domestic productivity slowed to near-halt, Zimbabwe’s Western partners turned into enemies who dished out sanction after sanction as a result of the former president’s decisions.

Now, Mnangagwa knows who is watching, and he would want to be seen as reaching out to former foreign partners through settling domestic disputes.

CNN reports that the country’s Finance Ministry hopes to pay the farmers via capitalization from long-term bonds on the international financial market. Perhaps, Zimbabwe believes it can kill two birds with a stone by not simply fixing issues at home but also creating room for a relationship with countries who would have been worried by the growth of China’s influence over the last decade.

China is responsible for about 75% of foreign direct investment in Zimbabwe.

Apart from facing the real possibility of backlash at home against the compensation agreement, President Mnangagwa must also walk a fine line in diplomacy to make both new and old international friends happy.