- Historic Compensation Initiative: Government has begun disbursing funds from a US$20 million allocation in the 2024 National Budget
- To compensate investors affected by the 2000 Land Reform Programme, marking a significant step in its debt resolution efforts
- International Support and Engagement: Welcomed by ambassadors from Germany, the Netherlands, and Switzerland
- Multi-Year Compensation Commitment: Government plans a multi-year compensation strategy
- Committing an additional US$20 million in the 2025 National Budget, with a total outstanding balance of US$125.9 million to be allocated through 2028
Harare- The Government of the Republic of Zimbabwe is demonstrating its unwavering commitment to honoring Bilateral Investment Protection and Promotion Agreements (BIPPAs) by compensating investors whose properties were affected by the Land Reform Programme of 2000.
This follows the disbursement of funds from the US$20 million allocated in the 2024 National Budget for the compensation of BIPPA-protected farm owners, marking a historic milestone in Zimbabwe’s Arrears Clearance and Debt Resolution Process.
Providing an update on the compensation process, the Minister of Finance, Economic Development, and Investment Promotion, Honourable Professor Mthuli Ncube, stated that, “I am pleased to announce that the compensation process has commenced.
“This initiative is a crucial step in fostering trust, fulfilling our legal and international obligations, and ensuring alignment with our Constitution as we address Zimbabwe’s debt challenge.”
Payments to eligible farm owners began in the second week of January 2025 and are being processed directly into their bank accounts of choice.
Only claimants from countries with BIPPAs that were signed and ratified before the 2000 Land Reform Programme qualify for compensation.
A total of 94 farms have been approved for compensation, with claimants originating from Denmark, Germany, the Netherlands, Switzerland, and the former Yugoslavia.
The ambassadors of Germany, the Netherlands, and Switzerland jointly welcomed the Government’s initiative.
“The framework established by the Government of Zimbabwe for the full compensation of BIPPA-protected farmers is a historic achievement.
“We commend the Government’s allocation of funds in the 2024 National Budget to make this compensation a reality. Several affected investors have received their initial payouts, fostering an emerging sense of closure.
“This marks a significant milestone and a step towards a fair and comprehensive resolution for farmers and investors in Zimbabwe, both in terms of financial restitution and land tenure. It is imperative that the Government maintains this positive momentum.”
The compensation initiative aligns with Section 295 (2) of the Constitution of Zimbabwe, which states that individuals whose agricultural land was acquired by the State before the effective date and whose property rights were protected by a bilateral agreement are entitled to compensation for the land and its improvements, in accordance with that agreement.
Dr. Akinwumi Adesina, President of the African Development Bank Group and Champion of the Zimbabwe Arrears Clearance and Debt Resolution Process, also commended the Government’s efforts:
“This compensation effort underscores the Government’s goodwill and commitment to restoring investor confidence and building trust in the reform process. Zimbabwe’s progress, resilience, and commitment to reform merit continued support from development partners to enhance the country’s reform implementation and provide essential support for its vulnerable populations.”
Compensation Under the Structured Dialogue Platform
The resolution of BIPPA-protected farms is a key reform under Zimbabwe’s Structured Dialogue Platform on Arrears Clearance and Debt Resolution.
Established in December 2022, this platform fosters engagement between the Government, creditors, and development partners to institutionalize discussions on economic and governance reforms crucial for addressing Zimbabwe’s arrears and debt sustainability.
The resolution of BIPPA claims falls under one of the three Sector Working Groups (SWGs) within the Structured Dialogue Platform. Specifically, it is part of the Land Tenure Reforms, Compensation for Former Farm Owners (FFOs), and Resolution of BIPPAs SWG, which is co-chaired by the Office of the President and Cabinet, Switzerland, and the United Nations Development Programme (UNDP).
The other two SWGs focus on Economic Growth and Stability Reforms and Governance Reforms.
During the most recent High-Level Structured Dialogue Platform Meeting held in Harare on 25 November 2024, the President, reaffirmed the Government’s commitment to leading the Arrears Clearance and Debt Resolution Process.
He emphasized that these reforms align with Zimbabwe’s National Development Strategy 1 (NDS1) and are crucial for fostering investor confidence and international engagement.
Multi-Year Compensation Plan and Future Fiscal Allocations
Following the initial disbursement of US$20 million from the 2024 National Budget, an outstanding balance of US$125.9 million remains. The Government has committed to a multi-year compensation plan, allocating funds through successive Annual National Budgets from 2025 to 2028 to fulfill its obligations. As part of this plan, an additional US$20 million has been allocated in the 2025 National Budget for BIPPA-related compensations.
The successful implementation of these reforms is a critical component of Zimbabwe’s strategy to achieve debt sustainability and unlock new concessional external financing. Such financing is essential for realizing the country’s broader economic development objectives under NDS1 (2021-2025) and facilitating the transition to National Development Strategy 2 (NDS2) (2026-2030).
This initiative represents a pivotal step in Zimbabwe’s re-engagement efforts with the international community.
The Government remains steadfast in implementing economic and governance reforms that enhance investment confidence, promote financial stability, and contribute to national economic development.
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