Compensation will be financed through debt: Mthuli

Compensation will be financed through debt: Mthuli

Finance Minister Mthuli Ncube has revealed that the US$3.5 billion compensation to former white farmers will be financed through a debt instrument.

The government and former farmers who lost land during the land exercise entered into an agreement that would see them getting compensated.

Most Zimbabweans are not happy with the agreement which was done without consulting them yet they will foot the debt bill.

Ncube told Parliament recently that resources will be raised internally and externally through a debt instrument.

“The Global Compensation Agreement is an agreement on the figure – global and final figure for compensation.

“The resources will be raised and in that statement, we have said the resources will be raised internally and externally. When we have agreed or concluded on the instrument through which the resources would be raised if it is a debt instrument; which is what we are targeting. That will be brought before Parliament because we cannot contract debt without Parliament.

“It is at that stage that the financing instrument will be brought to Parliament,” he said.

Contradictions in Zanu PF government

Contrary to Minister Ncube, President Emmerson Mnangagwa has been telling people that taxpayers money will not be used.

These contradictions in government over the issue of compensation has seen some speculating that the government might mortgage mineral resources.

The Chinese (Anjin Diamond Mining Company) is already back in Chiadzwa mining the problematic diamonds.

A few days ago, the Chinese were prospecting for coal in Hwange National Park before the government buckled under pressure.

Others predict that Harare might turn to the Afrexim Bank which provided cover for Bond Notes and other questionable deals.

Zimbabwe is currently limited in terms of borrowing due to a huge unserviced debt to international lenders.

The country owe the Paris Club, World Bank, African Development Bank, Chinese Development Bank and the Breton-woods institutions.

Although it managed to repay the International Monetary Fund (IMF) Zimbabwe is still far from reclaiming creditworthiness.

We have already been paying compensation

Meanwhile, Finance Minister Mthuli Ncube has revealed that the government was already compensating farmers but had not just quantified the size of the bill.

“Every year we appropriate out of this House an amount for payment of farmers. So, in this current budget for 2020, it was just about 300 million.

“The previous year, it was 70 million and it has been going on for years. So, all we did this time around was just to quantify what the size of this bill is.

“Previously, we did not know. We were just paying, we were not even sure how deep this hole was, we had no idea but now we know. That is what we have been searching for all these years.

“We have finally found the answer and with this 3.5 billion dollars. For us to get to this figure, we followed the law; we complied with the law and the appropriations that have been happening year to year to compensate the farmers are in line with the law.”

Ncube added that Section 295 and 72 of the Constitution speak of the need to compensate the farmers for improvements.

“That is clearly spelt out in the Constitution but I must say that this House has been paying farmers already. All we did now was to quantify the size of the liability- that is all,” he said.

Compensation will be financed through debt: Mthuli

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