Government Allocates Funds for CompensationHARARE, Zimbabwe – The Government of Zimbabwe has commenced payments to investors affected by the 2000 Land Reform Programme, under Bilateral Investment Protection and Promotion Agreements (BIPPAs). The payments follow the allocation of US$20 million in the 2024 National Budget for the compensation of farm owners covered by BIPPAs.
According to Minister of Finance, Economic Development, and Investment Promotion, Honourable Professor Mthuli Ncube, the process is a significant step towards fulfilling Zimbabwe’s obligations. “I am pleased to announce that the compensation process has begun. We believe that this process is crucial for building trust, honouring our commitments, and ensuring consistency with our Constitution as we address Zimbabwe’s debt challenge,” he stated.
Payments to the claimants began in January 2025 and are made directly into their chosen bank accounts. Only claimants from countries with BIPPAs signed and ratified before the 2000 Land Reform Programme are eligible. A total of 94 farms have been approved for compensation, covering claimants from Denmark, Germany, the Netherlands, Switzerland, and former Yugoslavia.
International community welcomes compensation effort
Ambassadors from Germany, the Netherlands, and Switzerland have acknowledged the government’s move. In a joint statement, they noted, “The framework established by the Government of Zimbabwe leading to the full compensation of affected BIPPA farmers protected by Bilateral Investment Promotion and Protection Agreements, is indeed a historic achievement. We commend the Government’s allocation of funds in the National Budget as of 2024 to make the compensation a reality. Several affected investors have received initial payouts, and an emerging sense of closure exists.”
The statement further emphasised the importance of maintaining momentum to ensure a fair settlement for all affected parties.
Legal and economic implications
The compensation process aligns with Section 295 (2) of the Constitution of Zimbabwe, which guarantees compensation to individuals whose land was acquired by the State under a bilateral agreement. The initiative is a key aspect of the Arrears Clearance and Debt Resolution Process, demonstrating Zimbabwe’s commitment to economic and governance reforms.
African Development Bank Group President, Dr Akinwumi Adesina, praised the initiative, stating, “The compensation demonstrates the Government’s goodwill and commitment to building trust in the process and improving investor confidence in the country. The progress Zimbabwe has made, the commitment and resilience it is showing, calls for support from development partners.”
Structured dialogue platform and reform process
The Government of Zimbabwe established a Structured Dialogue Platform in December 2022 to engage with creditors and development partners on economic and governance reforms. Compensation of BIPPA-protected farms falls under the Land Tenure Reforms, Compensation for Former Farm Owners (FFOs), and the Resolution of BIPPAs Sector Working Group. This group is co-chaired by the Office of the President and Cabinet, Switzerland, and the United Nations Development Programme (UNDP).
The other two Sector Working Groups focus on Economic Growth and Stability Reforms and Governance Reforms.
At the last High-Level Structured Dialogue Platform Meeting in November 2024, President Emmerson Dambudzo Mnangagwa reiterated the Government’s ownership of the Arrears Clearance and Debt Resolution Process, stating its commitment to implementing the necessary reforms.
Funding and future payments
The 2024 National Budget allocated US$20 million for compensation, with a remaining balance of US$125.9 million to be paid under a multi-year plan from 2025 to 2028. The 2025 National Budget has already earmarked an additional US$20 million for this purpose.
The successful implementation of these reforms is critical for Zimbabwe’s debt sustainability and economic recovery. The Government aims to clear arrears and secure new concessional financing to support its National Development Strategy 1 (2021-2025) and transition to National Development Strategy 2 (2026-2030).
The Government’s compensation initiative is seen as a significant step in resolving long-standing investment disputes and improving investor confidence in Zimbabwe’s economic future.
