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Zimbabwe may tap private creditors to pay evicted white farmers

To fund the first half of a $3.5 billion compensation agreement.
Image: Dan Kitwood/Getty Images

Zimbabwe is considering borrowing money directly from private investors to fund the first half of a $3.5 billion compensation agreement with White farmers whose land was seized two decades ago, a person familiar with the situation said.

The government, which last month appointed London-based Newstate Partners LLP to help it raise the money, needs to secure $1.75 billion by July next year to meet its obligations. Compensating the farmers is key to Zimbabwe’s repairing its relations with the US and other western countries that imposed sanctions on the country after the often-violent land seizures began in 2000. Zimbabwe’s economy subsequently collapsed as exports dwindled, and has stagnated ever since.

While the government is likely to press ahead with publicly stated plans to sell an international bond to finance the compensation accord, that option probably won’t be viable, said the person who asked not to be identified as the information hasn’t been disclosed publicly. A bond would be too expensive and need a guarantee from a multilateral lender that’s unlikely to be forthcoming as Zimbabwe hasn’t paid its arrears on more than $8 billion in debt, meaning it can’t borrow fresh capital from them.

If money is raised from private investors, a special-purpose vehicle could be set up offshore and a portion of the country’s tax or royalty earnings from mineral exports could be diverted into it to repay them over a number of years with interest, the person said. The SPV could also be used as a guarantee to bolster the confidence of potential lenders, they said.

Zimbabwe’s main exports include platinum-group metals, gold and tobacco.

Finance Minister Mthuli Ncube and his Permanent Secretary George Guvamatanga didn’t respond to calls and text messages seeking comment.

© 2021 Bloomberg

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One day, probably in the very distant future, the ordinary, honest, hard working people (that form the vast majority within Zimbabwe) will obtain release from the oppression of the evil greed. But first their true warriors need to be endowed with the undefeatable strength of a do-or-die backbone. History must repeat. The dangerous ruling money grabber soulless fraternity needs to meet its overwhelming match of committed people that are prepared to put their lives on the line in order to be rid of such oppressive evil. As the oppression increases upon the new generations so the will to make it happen increases. Evil will always eat itself.

Crowd funding? I just love these articles from Zimbabwe, very funny.

Not just compensation for the land and their life, I have family who were chased off by these savages in the middle of the night. Those children are still today seriously messed up…..

They left their house with just pyjamas, no money, passport, id. The savages slaughtered their dogs in front of them, forced them to watch.

Husband hung himself a few years later.

Zambia has shown the way – vote out ZANU-PF, even if they seriously cheat every election.

End of comments.

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