…despite COVID-19 threatening the process
Government has managed to mobilise funds to pay the former white farm owners (FFOs) as agreed under the Global Compensation Agreement (GCA), despite COVID-19 pandemic slowing down the process.
In a Press Statement, Minister of Finance and Economic Development, Professor Mthuli Ncube explained the source of the funds, how it will be managed and disbursed.
“In the 2021 National Budget, Government committed an amount of ZW$2 billion towards the compensation of FFOs. In addition, on 18 December 2020, Government secured USD250 million towards the compensation process through the donation of a shareholding of equal value in a mining asset - Kuvimba Mining House to a special purpose vehicle specifically created to raise funds for the GCA.
“An amount of USD1 million was declared in favour of the fund for compensating former farm owners,” said Minister Mthuli.
Government fulfilled the requirements of the Public Procurement and Disposal of Public Assets (PPDPA) Act (Chapter 22:23), and appointed a Financial Advisory Services for a joint resource mobilisation process with the Ministry of Finance and Economic Development.
“The procurement process went through several stages which took longer than had been originally anticipated. Nevertheless, we are pleased to advise that the process has now been completed and the contract with the Financial Advisors-Newstate Partners was signed on 21 April 202.
“The Financial Advisors have already commenced work with the JRMC supporting its capital-raising efforts,” said Prof Mthuli.
Meanwhile, due to the effects of COVID-19, the process has been slightly slowed down forcing Government to move the period for the first payment forward.
The COVID-19 pandemic slowed down the resource mobilisation process. The Parties to the GCD therefore agreed to extend the period for the full payment from 31 July 2021 to 31 July 2022.
The coming in of the New Dispensation saw Government and the FFOs come to the table where Government advised that it will not reverse the Land Reform Program that had seen the resettlement of many Zimbabweans. However, Government indicated it was prepared to compensate the FFOs for the developments made on the farms and the property they lost during the Land Reform Program. They reached an agreement that led to the signing of the Global Compensation Deed (GCD).
Meanwhile, according to the Financial Advisors, Newstate Partners, a number of financing instruments and funding options are already being worked on. They will include Bonds issued domestically (both listed and unlisted); Bonds issued into international markets (both listed and unlisted); listed and unlisted equity and quasi equity type instruments; structured financial arrangements including the issuance of assets backed securities and off balance sheet financing arrangements using commercial guarantees.