10 January 2014

Zimbabwe: Funding Hurdles Scupper Issuance of Land Leases

Zimbabwe's ruling Zanu PF government has failed to avail enough 99-year leases to thousands of black commercial farmers who obtained their land during the controversial land reform programme, with funding constraints affecting the process.

Described by President Robert Mugabe as a "critical milestone in the implementation and finalisation of the land reform programme", the leases were launched in 2006 to give the new farmers tenure which would serve as collateral to enable them to access funding for agricultural production.

But recent reports presented to the party's central committee and the party's annual conference held in Chinhoyi last month, indicate that only 53 leases for A2 farmers were given out last year, bringing the cumulative total to 140 leases registered to date. This is a minuscule figure given reports that over 240 000 new farmers have been given land since 2000.

"Fifty-three 99-year leases for model A2 farmers were produced this year," reads the report. "Registration was completed for eight of them bringing the cumulative total of 140 leases registered to date."

Zanu PF said the failure is due to funding problems which have incapacitated the surveyor-general's department which is tasked with drawing up the leases, forcing it to sub-contract to private surveyors who are owed over US$6 million by the cash-strapped government.

The party also admitted it still faces a huge dilemma of making the leases acceptable as collateral against which farmers can access loans to finance their activities while at the same time ensuring that this is not abused by beneficiaries.

It said: "Efforts to make the 99-year leases bankable are in progress," however "the challenge is how to make the lease collateral-friendly without turning it into a document that may facilitate the reversal of the gains of the land reform programme".

The government chose to issue the new farmers with 99-year leases, but these have been widely rejected as a form of collateral by lending institutions that argue they cannot repossess the land in the event of default as legally it still belongs to government.

Although the Bankers Association of Zimbabwe (Baz) could not be reached for comment as its phones went unanswered, last month it proposed government establishes a special purpose vehicle that would pay for loans in the event farmers default.

The Commercial Farmers Union (CFU), whose predominantly white members lost their land, have been vocal opponents of the 99-year leases, arguing that it turns the land into "dead capital" which cannot be accepted as collateral.

"Fourteen years after the start of the fast-track (land reform) programme, people have access to land, but they cannot raise the capital to farm. Production has consequently fallen and many farms lie idle," said CFU president Charles Taffs.

"Those people with the land are in a trap because the lack of secure tenure prevents them from raising capital."

In addition, the government admitted to failing to pay compensation to former white farmers who won their cases at the International Centre for Settlement of Investment Disputes (ICSID), an international institution established to deal with disputes between states and nationals of other states.

"The Dutch farmers who took the country to the ICSID and won have not been paid due to inadequacy of funds," read the report. "In addition, a German family, the Von Pezolds, have also taken us to the ICSID for their farms Forrester Estates and Border Timbers which we acquired and partially resettled."

The Von Pezolds are said to be demanding US$600 million.

Ads by Google

Copyright © 2014 Zimbabwe Independent. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.