Zimbabwe starts paying for farms it seized in the 2000s; countries paid include Denmark, Germany, Netherlands, Switzerland

By Bloomberg News

Zimbabwe has started paying reparations to nations and farmers whose land was seized in the 2000s, a step toward the restructuring of its $21 billion debt pile

Initial disbursements were made to Denmark, Germany, Netherlands, Switzerland and the former Yugoslavia last month for 94 farms that were taken, Finance Minister Mthuli Ncube said.

Fifty-six farmers from those countries, which had bilateral investment-protection agreements with Zimbabwe, were also paid.

“Payments are being made to the claimant’s bank accounts of choice,” Ncube said in a statement on Friday. The payments are “a critical step” toward Zimbabwe revamping its debt, he added.

The southern African nation has been locked out of international capital markets since 1999 after it defaulted on debt from lenders including the World Bank, Paris Club and African Development Bank.

The Treasury is using $20 million set aside in last year’s budget to make the initial payments, and will make multi-year fiscal allocations until 2028 to pay off the remaining $125 million that is owed, the finance minister said.

Harare-based ambassadors from Germany, Netherlands and Switzerland welcomed the move, saying “several affected investors have received initial payouts,” according to the statement. “An emerging sense of closure exits.”

An International Monetary Fund team is in the country to determine whether to place Zimbabwe on a so-called “staff-monitored program,” that would also be pivotal to securing a debt overhaul.