Seven firms apply to advise Zimbabwe on US$3.5 billion farm compensation, winner by year-end

(pic: Philimon Bulawayo/Reuters)

Zimbabwe plans to select a financial adviser by Christmas to help it raise US$3.5 billion to compensate white farmers, Finance Minister Mthuli Ncube says.

Resolving the issue is seen as crucial to restoring Zimbabwe’s relations with Western nations and multilateral lenders, including the U.S. and the International Monetary Fund, which have imposed sanctions on the country’s leaders and frozen financial assistance.

Seven applications were received after a call was made for an advisory firm and three of those, including local and international companies, have been shortlisted, Ncube said in a virtual interview on Monday. The government has identified some assets it can use as “seed capital” for the payments, which are meant to cover improvements made to the farms, such as dams, rather than the land itself.

“It is my hope that well before Christmas we can choose a winner,” he said.

[CLICK: Zimbabwe has signed a US$3.5bn compensation deal with white farmers. Here’s what you need to know]

The plans to raise the money, possibly getting some of it from an international bond sale, is complicated by the poor state of the Zimbabwean economy and a track record of failing to pay creditors. The country has external debt of more than US$8 billion.

Ncube said the economy is improving and he expects to post a current-account surplus of US$1.2 billion this year as well as a “very small budget deficit, if not a balanced budget.”

Measures taken to halt the slide of the Zimbabwe dollar have seen the currency stabilize at about 82 to the U.S. dollar since mid-August, after a precipitous plunge from 25 in late June when a peg to the U.S. unit was lifted.

“Stability, stability, stability is going to be critical going forward,” he said.

The country is trying to restore relations with the IMF and other multilateral organizations and hopes to have a staff visit by the time the Washington-based lender holds its so-called Spring Meetings in April, Ncube said.

“Token payments” to creditors will resume this month, he said.

President Emmerson Mnangagwa will launch the first of two five-year economic plans on Nov. 16, he said. The aim is to almost triple the per capita earnings of Zimbabweans to US$3,500 by 2030 from US$1,300 now.

Ncube also said:

His ministry doesn’t plan to clamp down on business being done in foreign currencies in the country; There are no plans to increase the frequency of weekly currency auctions; The government is targeting mining and industrial companies in a drive to have more firms list on a dollar-denominated stock exchange in the resort town of Victoria Falls.