Zimbabwe's government signed a $3.5 billion agreement Wednesday to compensate white farmers displaced during a sometimes-violent land redistribution program two decades ago.
The government hopes the deal will attract foreign investment to improve the battered economy, but the country will have to issue long-term bonds and get help from donors to raise the money for the compensation.
Andrew Pascoe, the president of the Commercial Farmers Union of Zimbabwe, said the agreement he signed with President Emmerson Mnangagwa at the State House will bring relief to members who were driven off their farms in the early 2000s.
"After almost 20 years of conflict over the land issue, representatives of farmers who lost their land through the fast track reform program and representatives of government have been able to come together to see a resolution of this conflict," Pascoe said. "To me this is nothing short of a miracle."
Mnangagwa said he hoped the agreement would make investors and critics of his government believe that Zimbabwe respects the constitution. However, he ruled out compensating for the actual land taken from the whites and given to peasant farmers.
"With regards to the land compensation agreement signed today, my administration reaffirms that the government of Zimbabwe does not have any obligation for compensation for acquired land," he said. "The constitution bids us to compensate [for] all the improvements on land."
By improvements, the president means structures such as dams and buildings that the white commercial farmers made on the land.
The 77-year-old leader said he hopes that with the land issue solved, all resettled farmers will focus on increasing production so that Zimbabwe can regain its position as the breadbasket of southern Africa and revive the moribund economy.
However, John Robertson, an independent economist, said the cash-strapped government still has a lot to do before the land compensation issue can go away.
"The money is not yet available," he said. "Even though they signed an agreement, it doesn't mean the money is now going to be distributed. Now that they have signed an agreement, they are going to use that agreement – no doubt – they are going to use that signature as a way to raise the money."
Robertson suggested one way to raise the money would be to put the land back on the market, so it can be bought and sold. Currently, the government claims ownership of all the land.
Under the late Robert Mugabe, Zimbabwe's government ruled out giving back land to white commercial farmers, saying they grabbed it from black people during the colonial era.
When the land was redistributed, farm production plunged, sending Zimbabwe's economy into a tailspin from which is has yet to recover.