A new bill in the US Congress could repeal the long-standing Zimbabwe Democracy and Economic Recovery Act (ZDERA). However, economic cooperation with the US would still depend on settling an old quarrel: how to compensate white former commercial farmers.
Brian Mast, a Republican from Florida and Chairman of the House Foreign Affairs Committee, has introduced an omnibus Bill, proposing the “Department of State Policy Provisions Act”. It proposes broad changes to US foreign policy, from how its citizens engage hostile foreign entities to stepping up its economic interests in Africa. Mast says the Bill “prevents ideologues masquerading as diplomats from using their posts to push left-wing agendas instead of America’s interests.”
Included in Mast’s Bill is a proposal to drop ZDERA, first enacted in 2001 and amended in 2018. While ZDERA would be dropped under the Bill, US cooperation with Zimbabwe would still be on condition that Zimbabwe fully pays white former farmers, displaced under Zimbabwe’s fast-track land reform programme.
“The United States shall not support any new or expanded funding from the International Monetary Fund or the International Bank for Reconstruction and Development (commonly known as the World Bank) for the Government of Zimbabwe unless the Government of Zimbabwe shall commit, within 12 months of the approval of such new or expanded funding, to remit all outstanding arrears owed under the Global Compensation Deed, inflation adjusted to the date of enactment, and compensation shall not be in the form of Zimbabwe issued securities,” says the Bill. “Failure to comply with this provision shall result in an immediate cessation of all United States support for any further funding from these institutions.”
What does this mean?
In 2020, Zimbabwe reached a controversial deal with white farmers. Under that deal, Zimbabwe will not compensate for land taken over under the land reform program, but only for ‘improvements’ on the farms. The total compensation to be paid is US$3.5 billion.
As at April this year, payment was approved for the first group of 378 farms, for a total of US$311 million. However, just 1% of the compensation – US$3.1 million – was to be paid in cash. The rest is to be issued in USD-denominated Treasury bonds. These bonds carry a 2% annual coupon rate with maturities of 2-10 years. Treasury allocated US$10 million in the 2025 National Budget for farmer compensation.
Government says these payment plans and bonds are necessary, as Zimbabwe cannot pay out US$3.5 billion in a short period. But, should this new Bill go through, Zimbabwe would be required to pay what it owes within a year of the World Bank or the IMF agreeing to any new lending. Any bonds issued in Zimbabwe, including USD securities, would not be acceptable.
Zimbabwe currently cannot access new World Bank loans, because it is in arrears with many creditors. It is US$21 billion in debt, and is in talks with creditor countries for a deal to clear arrears. Once those arrears are cleared, Zimbabwe would qualify for new World Bank funding. If this Bill passes and Zimbabwe secures a debt-clearance deal and gets loan approval from the World Bank, Zimbabwe must pay white farmers in full within a year. If that doesn’t happen, the US would bar such loans to Zimbabwe.
What does ZDERA currently say about white farmers?
ZDERA was introduced in 2001 as a response to human rights abuses in Zimbabwe, land reform, and Zimbabwe’s involvement in the DRC war. That version of ZDERA ordered US officials at institutions such as the World Bank to oppose any new lending or debt relief to Zimbabwe until property rights and democracy were restored. This is echoed in the new Bill now in Congress.
A new version of ZDERA was enacted in 2018. That version stated that Zimbabwe must enforce the rulings of the SADC tribunal on land reform. The rulings, issued in favour of a group of white farmers in 2007, stated that land reform was illegal as it discriminated on race. The rulings also demanded full compensation for the land – and not only for improvements – and also recommended giving back the farms taken over for resettlement.
Zimbabwe’s Constitution, under Section 295, only allows compensation to “indigenous Zimbabweans” and those under Bilateral Investment Promotion and Protection Agreements (BIPPAs). White farmers are only “entitled to compensation from the State only for improvements that were on the land when it was acquired”, which is contrary to the demands of the tribunal’s rulings. – NewZwire
