GOVERNMENT’S seizure of 23 white-owned commercial farms last week for its “agriculture resettlement” raises questions about Zimbabwe’s commitment to respecting property rights, one of the major issues highlighted as a stumbling block to investment by business delegations visiting Zimbabwe of late.
The farms were acquired under the land reform programme, often described as chaotic and controversial, which began 15 years ago, but showing no signs of finalisation despite government’s admission the plan has been an embarrassing failure.
Although government has always argued that the land is being acquired lawfully and in terms of the constitution, lack of secure property rights founded on the rule of law is a serious obstacle to foreign direct investment which the country — buffeted by a stubborn economic crisis — desperately needs.
Respect for property rights is one of the major areas highlighted by the International Monetary Fund (IMF) in the first review of the Staff-Monitored Programme (SMP) with Zimbabwe.
Under the first review of the SMP, the IMF states that Zimbabwe’s economic prospects remain difficult as growth has slowed and is expected to weaken further in 2015. According to the review, for sustained growth to occur, government “needs to address macro-economic vulnerabilities which include infrastructure gap, poor business climate, property rights and long-standing land-related issues”.
Moreover, the review emphasises that to unleash financial resources and external capital flows, Zimbabwe has to first address the mentioned structural impediments.
Zimbabwe is implementing a macro-economic stabilisation and structural programme in the context of the SMP approved in October last year. The 15-month programme’s objective is to strengthen the country’s external position as a pre-requisite towards arrears clearance, resumption of debt servicing and restoring access to external financing.
Among the gazetted land is that of African Distillers (Afdis), a household name in the manufacture and export of sparkling wines, which boasts of being one of the few Zimbabwean companies still exporting.
Despite being productive, government listed the company’s farm, Springvale Estate in Umzingwane district, measuring 1 355 835 hectares alongside 22 other farms owned by whites.
Listed on the Rhodesian Stock Exchange in 1951, Afdis is one of the country’s major employers in an economy characterised by a debilitating liquidity crunch which has led to company closures and unprecedented job losses.
Only last year, the company commissioned a new cider plant, which improved output from 34 million litres to 54 million litres. The beverage manufacturer is exporting ciders to Malawi and will soon be exporting to Zambia and Mozambique.
Nor is Afdis the first firm to have its land seized. The seizure of Interfresh Holdings’ Mazoe Citrus Estate, the group’s prime land asset, by President Robert Mugabe’s wife Grace in 2012, blocked external lines of credit to the company as it emerged traditional financiers, including Industrial Development Corporation South Africa (IDCSA), feared their investment was at risk as the company struggled for survival.
The continued land grabs are therefore likely to result in adverse reports from multilateral institutions, the donor world and potential investors, thereby negatively affecting the country’s efforts to attract investment and funds into the country suffering from a swingeing liquidity crunch.
Ironically, the continued seizures of farms are occurring against the backdrop of government’s admission that the land reform programme has been a failure as most resettled farmers lack the means and capacity to utilise the land productively.
Government is currently carrying out a land audit amid revelations that most political bigwigs, including Mugabe, own multiple farms against the country’s one man one farm policy. It is also in the process of cutting the size of land allocated to many farmers as it is too large for them to manage. This suggests there is still some way to go yet before the land reform programme is a closed chapter.
In March, Mugabe said resettled farmers were under-utilising the land allocated to them under the land reform programme, using the farms as status symbols instead.
“It is out now that quite a good many of those who got farms on the A2 system are not running them … (They say) I’m a farmer, I have a farm, but what are you producing? That’s what we want to know …,” Mugabe said.
In June, Vice-President Phelekezela Mphoko accused resettled farmers of failing to feed the nation, after the country once again suffered a poor harvest.
“It’s true that the resettled farmers have failed us,” he lamented. “They have put to shame our President … We were once the breadbasket of the region, but these farmers have destroyed the agriculture sector.”
Much of the land repossessed by government since 2000 is lying idle with farmers indicating lack of equipment and capital to acquire farming inputs as major impediments.
Financial institutions have balked at accepting A1 permits and 99-year lease documents issued by the state as collateral for farming loans because the land still belongs to the state and cannot be used as collateral, thus contributing to low production levels.
Under Section 72 of the constitution, all agricultural land belongs to the state and can be acquired for a public purpose.
“… the land, right or interest may be compulsorily acquired by the state by notice published in the Government Gazette identifying the land, right or interest, whereupon the land, right or interest vests in the state with full title with effect from the date of publication of the notice,” reads Section 17(c)(2).
Zimbabwe National Chamber of Commerce chief executive Takunda Mugaga said government’s failure to finalise the land reform programme is damaging for business.
“It is unfortunate that government is failing to finalise the land issue and this is causing challenges on the value chain; it is impacting on job figures, liquidity levels, ease of doing business and protection of property rights,” he said.
“One of the major reasons the economy is comatose is the inefficiency and excesses in the agriculture sector. We really need to make sure we do not target race in as far as land issues are concerned because we have a number of black citizens owning many farms.”