Zimbabwe Gov’t Fulfills Commitment to Compensate Investors Under BIPPAs
The Government of Zimbabwe has begun compensating investors protected under Bilateral Investment Protection and Promotion Agreements (BIPPAs), marking a significant milestone in the country’s economic reform agenda. This follows the allocation of US$20 million in the 2024 National Budget to compensate farm owners whose investments were affected by the Land Reform Programme in 2000.
Minister of Finance, Economic Development, and Investment Promotion, Honourable Professor Mthuli Ncube, confirmed the commencement of the compensation process. “We believe that this process is crucial for building trust, honouring our commitments, and ensuring consistency with our Constitution as we address Zimbabwe’s debt challenge,” he stated.
The payments began in the second week of January 2025 and are being deposited into claimants’ bank accounts. Only claimants from countries with BIPPAs signed and ratified before the 2000 Land Reform Programme are eligible for compensation. The 94 approved farms belong to investors from Denmark, Germany, the Netherlands, Switzerland, and former Yugoslavia.
The move has been welcomed by Harare-based ambassadors of Germany, the Netherlands, and Switzerland, who described it as a historic achievement. “The framework established by the Government of Zimbabwe leading to the full compensation of affected BIPPA farmers is a significant milestone. Several affected investors have received initial payouts, and an emerging sense of closure exists,” they stated.
The compensation initiative aligns with Section 295 (2) of Zimbabwe’s Constitution, which mandates compensation for landowners protected by international agreements. It is also a crucial aspect of the country’s Arrears Clearance and Debt Resolution Process, designed to restore investor confidence and improve engagement with international financial institutions.
The President of the African Development Bank Group, Dr. Akinwumi Adesina, hailed the compensation as a step towards fostering trust and boosting investor confidence. “The progress Zimbabwe has made calls for support from development partners to facilitate ongoing reforms and provide the much-needed cushion for vulnerable populations,” he said.
The compensation of BIPPA-protected farms falls under the Land Tenure Reforms, Compensation for Former Farm Owners (FFOs), and Resolution of BIPPAs Sector Working Group (SWG), co-chaired by Zimbabwe’s Office of the President and Cabinet, Switzerland, and the United Nations Development Programme (UNDP). This initiative is part of the broader Structured Dialogue Platform, established in December 2022, to institutionalize engagement on economic and governance reforms.
President Emmerson Dambudzo Mnangagwa reiterated his administration’s commitment to the Arrears Clearance and Debt Resolution Process at the last High-Level Structured Dialogue Platform Meeting in November 2024.
Following the initial disbursement, the remaining balance of US$125.9 million will be paid through a multi-year plan, with annual fiscal allocations in the National Budgets from 2025 to 2028. An additional US$20 million has already been allocated for 2025.
The successful execution of these reforms is critical to Zimbabwe’s efforts to clear arrears, attain debt sustainability, and secure new concessional external financing. These steps are integral to achieving the country’s economic development goals under the National Development Strategy 1 (2021-2025) and preparing for the transition to National Development Strategy 2 (2026-2030).
