Without granting secure tenure to new farmers so that they can use the land as collateral to obtain funding for production and infrastructure development on the farms, the government will not be able to achieve its goal to ensure macro-economic stability in the country, an International Monetary Fund (IMF) official has said.
IMF local representative Patrick Imam last week said government’s efforts should address fundamental issues in the economy such as mining and agriculture.
“My parting shot is: Zimbabwe should hasten to address structural problems of the economy, not symbolical. As long as it does not tackle the issue of land, which I know is very sensitive, it will not be able to kick-start the agricultural sector, therefore the agro-industry will suffer. Even if they were to have macro-economic stability,” he said.
Zimbabwe used to be the bread basket of Southern Africa, but has since become an importer of grains such as maize and wheat.Imam was speaking at a Zimbabwe multi-stakeholder debt conference held in the capital last week.
Zimbabwe has been grappling with underutilisation of land following the land redistribution programme of 2000, which has resulted in low production.
This has led government to consider redistributing land after a comprehensive land audit, while it also seeks to compensate dispossessed commercial farmers but again it is also seized with the bankability of title deeds, which has made it difficult for local famers to access loans from financial institutions.
Imam said it was challenging to separate the economic and political reforms.“In 2009 up to 2013 the economy recovered, but has since stagnated. You know why? It’s because the country failed to address the fundamentals of the economy. Mining is important as much as the agro industry, as such we should tackle the issue of land,” he said.
Imam expressed concern at the slow pace of political reforms by the government, saying this was impeding any hopes of having the country’s debt restructured.
Commercial Farmers’ Union director Ben Gilpin on Tuesday told businessdigest that there were several thousands of individuals or farming businesses with claims against the Zimbabwean government.
Government forcibly repossessed land from white commercial farmers under its land redistribution exercise at the turn of the century, but did not compensate them for developments such as irrigation on the land.
He added that he was hopeful that compensation would be handled in a positive way. Should it be handled properly, he says this will aid the country’s economic recovery.
Gilpin said there has been progress on Interim Relief Payments with around 60% of the approximately 750 successful applicants having been paid RTGS $55 000 each.
The money is expected to be offset in real terms against US dollar-based compensation in due course.“In the real scheme of things, it is not much but nonetheless it is assisting some elderly farmers to get by and is a start. As regards to the main compensation, at present there is work being done by expert independent assessors who are looking at the valuation rolls for acquired farms prepared by both government and farmer-appointed valuation professionals.
They will also look at a number of individual farm valuations from both sides to make detailed comparisons. We hope their recommendations will help find a way forward as regards valuations,” he said.
Economist Eddie Cross says while there is a new crop of farmers appearing, it is going to take time for banks to step in with funding.He said organisations with the responsibility to buy farm produce have no money and the prices often paid bear little relation to the cost of production.
“Fixing this mess is not going to be easy. We have to start by finishing what we started by paying for the assets we took over from the previous generation of farmers. That is not going to be cheap. Most accept today that we have to pay for the land and fixed assets acquired, this will eventually cost us about US$9 million,” he said.
Imam also said one of the essential reforms would be the alignment of laws with the country’s constitution.“The perception they (IMF-member countries) have is that Zimbabwe has started the economic reform path but has not sufficiently moved on political reforms. What this means is aligning laws to the constitution,” Imam said.
“As long as the political reforms don’t move at the same time with economic reforms we will not have the debt rescheduling. Therefore we will unfortunately have to be on our own until we move on both sides.”