The predominantly financial sanctions imposed on Zimbabwe involved the cutting off of all foreign currency inflows into Zimbabwe, including short and long-term loans; the cutting off of off-shore lines of credit, and in the process, scaring away any lines of credit from all international banks, writes Dr Felix Muchemwa in his book The Struggle for Land in Zimbabwe (1890-2010) that The Patriot is serialising.
UNDER Phase One of the Land Reform Programmme between 1980 and 1997, a total of 3 500 000 hectares of land was acquired by the Government and allocated to mainly A1 land beneficiaries, (Hungwe p.149) and, under the Fast Track Land Reform Programme between 2000 and 2003, a total of 10 839 108 hectares of land was gazetted and acquired by the Government, (Utete Report p.24) giving a total of
14 339 108 hectares of land gazetted and acquired by the Government by 2003.
A total of 10 839 108 hectares of land was acquired during the Fast Track Land Reform Programme.
This figure doubled the 5 000 000 hectares rejected by the Donors Conference in 1998 as being over-ambitious. (Matondi-Hungwe, 2006: p.72-3)
The fluidity of the allocation and resettlement of land and the continuation of land disputes between white settler farmers and the Zimbabwe Government posed a lot of challenges as to the reliability of the land transfer data.
In this regard, the Utete Report gave firm figures as to how much land had actually been transferred by July 31 2003. (Moyo et al, 2009: p.20)
The Fast Track Land Reform Programme was an instrument for definitive land restitution to Zimbabwe’s African people previously deprived of their ancestral lands through the British right of conquest.
It also addressed the injustices (Hungwe p.156) associated with colonial occupation.
The Land Reform Programme was an agrarian revolution which, however, was quite different from nationalisation of the land or ‘land to the tiller’ distribution of pre-capitalist forms of landed property. (Scoones et al, 2010: p.10)
Instead, capitalist models were retained through the retention of part of the white settler-farmland (with greatly reduced size) and the establishment of the equivalent of an African commercial farming community on an equal basis to that of the white settler-farmer community.
Under the Fast Track Land Reform Programme, by far the largest number of land beneficiaries on the A1 Model Scheme (about 87 percent) were the rural poor, farm workers or people with relatively low social status and limited financial or commercial connections. (Moyo et al, 2009: p.174)
But urban working people or the unemployed also benefitted. (Moyo et al p.174)
However, for most of the earlier days of resettlement, most peasant and African commercial farmers, whether on A1 or A2 farms had settled on the farms without basic infrastructure or resources. (Scoones et al, 2010: p.25)
Economic sanctions: International consequences of Zimbabwe’s compulsory land acquisition programme
In the early 1990s, the World Bank introduced the Economic Structural Adjustment Programme (ESAP) whose failed policies set off a decline in Zimbabwe’s economic fortunes. (Scoones et al, 2010: p.25)
However, up until 1997, the country continued to enjoy a balance of payment support facility, in place since 1980, from the IMF, the World Bank and the African Development Bank. (Gono, p.2)
It was against this background, that in November 1997, the Government of Zimbabwe pushed forward the ambitious Phase Two of the Land Reform Programme, targeting for the first time, the compulsory acquisition of 1 471 farms totalling
5 000 000 hectares of land under the powers of the Land Acquisition Act of 1992. (Scoones et al, 2010: p.20)
Out of the 14 000 000 hectares of land in settler-farmer possession, this would have left the 4 300 European settler-farmers with over 9 000 000 hectares of highly fertile land on the Zimbabwean highveld, in Agricultural Regions One, Two, Three and Four.
The compulsory land acquisition would not have disturbed the farming activities of most white settler-farmers, including those who would have lost the extra agricultural land they owned. (Matondi-Hungwe, 2006: p72)
Most of the 1 471 farms targeted for compulsory acquisition by the Zimbabwe Government were owned, in multiple units, by the large scale commercial farming companies and syndicates, virtually all of which had strong Anglo/South African and American connections, mostly dating back to 1890, when Zimbabwe was invaded by the Pioneer Column. (Hodder-Williams, 1967: p.46)
There were also individual white settler-farmers, 50 percent of whom were multiple farm owners. (Scoones et al, 2010: p.20)
The listing of the 1 471 farms in 1997 for compulsory acquisition sent shock-waves in the white settler-farmer community whose pre-emptive response was the clandestine launch of a well-organised predominantly economic sanctions campaign against the Zimbabwe Government. (Richardson p.549)
The predominantly financial sanctions imposed on Zimbabwe involved the cutting off of all foreign currency inflows into Zimbabwe, including short and long-term loans; the cutting off of off-shore lines of credit, and in the process, scaring away any lines of credit from all international banks. (Gono p.2)
It was not surprising, therefore, that on November 14 1997,the Zimbabwean currency (Zimdollar), crashed against all the international foreign currencies and this was maliciously attributed to the Zimbabwe Government spending on unbudgeted payment of gratuities to the war veterans of the liberation struggle of the 1970s. (Scoones et al, 2010: p.25)
The war veterans, in any case, were never paid any gratuities in foreign currency and as such could not be the primary cause of the financial crisis which caused the local currency to crash on the Zimbabwean Stock Exchange market (ZSE).
In reality, the Zimdollar took a plunge from November 14 1997 to the end of 1998 because of ‘loss of confidence in Government policy including the publicly-stated intention to acquire white-owned commercial farms for resettlement.
‘At the end of 1998, the value of the stocks traded on the ZSE had dropped by 88 percent’. (Richardson p.549)
In January 1998, the Government of Zimbabwe applied for US$174 million from the IMF, and this was scheduled for consideration in March 1998.
The application was turned down.
Also in January 1998, the Zimbabwe Government negotiated for financial aid from the European Union (EU) and, as a condition for the loan, the EU demanded that the Zimbabwean Government should pledge, in writing, that it would not compulsorily acquire land from the white settler-farmers.
On the whole, between November 1997 and the end of 1998, the major Western financial donors to Zimbabwe froze financial aid worth more than US$385 million dollars pending a cue from the IMF. (Stiff, 2000: pp.317-319)
Even the African Development Bank stopped its balance of payment support to Zimbabwe in 1998 under very unclear circumstances. (Gono p.3)
This also explained the unwillingness of virtually all donors to pledge any funds at the International Donors Conference on Land Reform and Resettlement Programme in Zimbabwe held in Harare in September 1998.
Owing to the close connection of most Zimbabwean agricultural companies, syndicates and individual European settler-farmers relocated to South Africa, it was not surprising that by December 15 1999, most South African Banks had suspended all their lines of credit to Zimbabwe, thus dealing a crippling blow to Zimbabwe’s predominantly agro-based industrial sector due to lack of finance. (Stiff, 2000: pp.320)
Inside Zimbabwe, the white farmers made sure that any source of foreign currency inflows through agricultural productivity was stopped with immediate effect.
In the 1999-2000 agricultural season, commercial farmers planted just 200 000 hectares of tobacco and when the tobacco auction floors opened in March 2000, there were only 3 500 bales of tobacco, instead of the usual 10 000 bales.
Furthermore, the price of the tobacco was disgustingly low at US$0,99/kg down from the usual above US$2/kg price.
Cde Joice Mujuru, then Minister of Agriculture present at the opening of the March 2000 Tobacco Auction Floor, described the white farmer boycott as ‘a deliberate attempt to pressurise the Government’. It was an act of sabotage. (Stiff, 2000: p.361)
With time, the situation worsened.
In the 2000-2001 season, the settler-farmers grew 90 000 hectares of tobacco, which decreased to 50 000 hectares in the 2001-2002 season. (Richardson p.551)