Exiled ex-minister alleges corruption in Reserve Bank of Zimbabwe loans to resettled farm owners

24 Avril 2020

Harare, Zimbabwe, April 24 (Infosplusgabon) - Zimbabwe's exiled former Higher Education deputy minister Godfrey Gandawa alleges that political elites were key beneficiaries of US$1.35 billion in loans from the central bank in 2015, made to resettled farmers following the controversial 2000 Land Reform Programme.

The programme was implemented by government which forcefully removed predominantly white farm owners from their land to pave way for black ownership.

However, the programme has been widely criticized as the 'black ownership' was cover-up for mostly political elites, namely, government officials, their family members and those politically linked to either the state or the ruling ZANU PF party.

“The Reserve Bank of Zimbabwe engaged in quasi-fiscal activities that included, among other things, the allocation of farm equipment and extension of loans. These were not repaid. In 2015, debts amounting to US$1.35 billion were transferred to the taxpayer through the RBZ Debt Assumption Bill,” said Gandawa, in a report titled ‘White Paper on Land Reform and Tax Driven Compensation’, released on his Twitter account.

“The authorities refused to disclose the beneficiaries of those loans. There is considerable evidence that political elites were key beneficiaries. US$1.35 billion is a significant amount of money and, even before negotiations, would settle 20 percent of the compensation demands levelled by victims of the land reform programme. After negotiations, this could rise to between 30 to 40 percent.”

Zimbabwe's Land Reform Programme created two 'models' for resettlement farms – one relatively small-scale referred to as 'A1 farms', and medium to large-scale called 'A2 farms'.

On average, the size of A2 farms is 318 hectares, while that of A1 farms is 37 hectares, including crop and grazing land.

Most of the political elites own the A2 farms that used to be highly productive.

RBZ governor John Mangudya did not answer repeated calls made to his cellphone seeking a comment on the matter.

Gandawa said that once the loans were taken out, they were mostly associated with A2 farms.

"These loans are associated with particular A2 farms and the liability must be associated with that land, with a requirement for immediate settlement. In the event that the beneficiaries are unable to pay then the normal processes that include seizure of property must be followed," he said.

“This approach would have the direct effect of holding political elites to account for their actions without necessarily targeting them as individuals."

As a result of land going to political elites, instead of knowledgeable farmers, most of the land became idle and unproductive.

Gandawa said corruption in the redistribution of land was more pronounced during the 2008 elections when political patronage was deployed by the ZANU PF elite in a bid to retain power.

“Provincial and district land committees, responsible for land allocations, are both deputised by the respective Zanu PF chairpersons. This anomaly, in which a political party sits on a land committee, provided ample opportunity for the ruling party to exploit land as a patronage tool,” Gandawa said.

“While A1 resettlement, which was primarily aimed at improved subsistence, required little if any qualifying criteria apart from citizenship, A2 resettlement of necessity required a high criterion on account of the broader economic implications.”

He added: “Unfortunately, many of the A2 beneficiaries were not evaluated on the basis of need or capacity, with the result that vast tracts of previously highly productive land now lies idle. Regrettably, many of those holding onto these large pieces of land have no use for it and no capacity to exploit it”.

This, among other reasons, is one of the major factors why Zimbabwe’s financial institutions refused to borrow to resettled landowners who used these farms as collateral through government's proposed 99-year lease agreements.

The 99-year lease agreement refers to a legally binding document between the resettled farmers and government that would allow the former to borrow from financial institutions using the farmland as collateral with the latter providing guarantee.

However, the main reason why financial institutions rejected these agreements is because it did not award title to the resettled farm owners as the farms would be leased.

Before, the land reform programme, farm land acted as the largest collateral base in Zimbabwe which allowed for the acquiring of loans from financial institutions which injected a lot of liquidity into the economy.

“There is a public interest in ensuring land productivity. While land is finite and can only be practically distributed to a limited number of individuals, the economic benefits that accrue from the exploitation of that land extends to the rest of the population through direct job creation, up and down-stream economic activity and national food security,” Gandawa said.

“The possession of large tracts of land by individuals without interest and capacity to exploit it therefore fails to meet the equitable distribution standard.”

Some estimates put the value of farm land in Zimbabwe around US$10 billion before 2000.

In order to address corruption, property rights and compensation to previous farm owners, government this year introduced Statutory Instrument 62 of 2020.

But, regional human rights watch, SADC Tribunal Rights, spokesperson Ben Freeth told that the law flew in the face of international law and needed to be challenged as the compensation on offer to farmers was below the true value of the land.

FIN/INFOSPLUSGABON/PLM/GABON2020

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