The Government of Zimbabwe is honoring its commitment to compensate investors covered under the Bilateral Investment Protection and Promotion Agreements.
These are mostly foreign farmers whose investments were affected by the Land Reform Program in 2000.
This follows the disbursement of funds from the USD 20 million allocated for the compensation of Bilateral Investment Protection and Promotion Agreements (BIPPAs) protected farms in the 2024 National Budget.
The payments to farm owners under BIPPA-protection marks a historic milestone and a critical step in Zimbabwe’s Arrears Clearance and Debt Resolution Process.
Providing an update on the payments, the Minister of Finance, Economic Development, and Investment Promotion, Professor Mthuli Ncube said he was 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.”
The payments towards the compensation of investors under the Bilateral Investment Protection and Promotion Agreements protection began in the second week of January 2025. Payments are being made to the claimants’ Bank accounts of choice.
Only claimants from countries with BIPPAs signed and ratified before the 2000 Land Reform Programme are eligible for compensation.
A total of 94 farms were approved for compensation. The claimants are from Denmark, Germany, the Netherlands, Switzerland and former Yugoslavia.
The Harare-based ambassadors of Germany, the Netherlands and Switzerland jointly stated that the framework established by the Government of Zimbabwe leading to the full compensation of affected BIPPA farmers was historical 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.”
They said it marked a significant milestone and consider it a very encouraging step towards a comprehensive and fair settlement for farmers and investors in Zimbabwe, be it in terms of financial compensation or land tenure.
The compensation of BIPPA-protected farms is in line with Section 295 (2) of the Constitution of Zimbabwe, which provides ‘any person whose agricultural land was acquired by the State before the effective date.
It also applies to recipients whose property rights at the time were guaranteed or protected by an agreement concluded by the Government of Zimbabwe with the Government of another country, is entitled to compensation from the State for the land and any improvements in accordance with that agreement.’
The President of the African Development Bank Group and the Champion of the Zimbabwe Arrears Clearance and Debt Resolution, Dr Akinwumi Adesina said, 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 to facilitate the country’s effort in implementing ongoing reforms and to provide the much-needed cushion to particularly the vulnerable members of the population.”
The compensation of these investors is one of the key reforms under the Structured Dialogue Platform on the country’s Arrears Clearance and Debt Resolution Process.
The Government of Zimbabwe established in December 2022, a Structured Dialogue Platform with all its creditors and development partners, to institutionalize engagement on economic and governance reforms to underpin the Arrears Clearance and Debt Resolution Process.
The Resolution of BIPPA-protected farms is under the auspices of one of the three Sector Working Groups (SWG) of the country’s Structured Dialogue Platform for Arrears Clearance and Debt Resolution Process.
It falls under the Land Tenure Reforms, Compensation for Former Farm Owners (FFOs), and the Resolution of BIPPAs SWG.
This Sector Working Group is co-chaired by the Office of the President and Cabinet, Switzerland and the United Nations Development Program (UNDP).
The other two Sector Working Groups are Economic Growth and Stability Reforms, and Governance Reforms.
At the last High-Level Structured Dialogue Platform Meeting held in Harare on 25 November 2024, the President of Zimbabwe Dr Emmerson Dambudzo Mnangagwa, reiterated the Government’s ownership of the Arrears Clearance and Debt Resolution Process, and his commitment to the implementation of reforms underpinning the Process, in line with the country’s National Development Strategy.
After the disbursement of the USD 20 million allocated in the 2024 National Budget for the Bilateral Investment Protection and Promotion Agreements (BIPPAs) protected farms, the balance, amounting to USD 125.9 million, will be paid under a multi-year payment plan, where the Government will make fiscal allocations through Annual National Budgets over the next four years, 2025 to 2028.
In this regard, the Government has provided a further USD 20 million in the 2025 National Budget for this purpose.
The successful implementation of reforms under the Structured Dialogue Platform Process is a central component of Zimbabwe’s efforts towards the clearance of arrears and the attainment of debt sustainability, in order to unlock new concessional external financing.
This is critical for the country to achieve its economic development aspirations, under Zimbabwe’s National Development Strategy 1 (2021-2025), and also the transition towards the implementation of the National Development Strategy 2 (2026-2030).