By Felix Njini and Antony Sguazzin
Government, which last month appointed London-based Newstate Partners to help it raise the money, needs to secure $1.75 billion (~R26 billion) by July next year to meet its obligations.
Compensating the farmers is key to Zimbabweâs repairing its relations with the US and other western countries that imposed sanctions on the country after the often-violent land seizures began in 2000. Zimbabweâs economy subsequently collapsed as exports dwindled, and has stagnated ever since.
While the government is likely to press ahead with publicly stated plans to sell an international bond to finance the compensation accord, that option probably wonât be viable, said the person who asked not to be identified as the information hasnât been disclosed publicly. A bond would be too expensive and need a guarantee from a multilateral lender thatâs unlikely to be forthcoming as Zimbabwe hasnât paid its arrears on more than $8 billion in debt, meaning it canât borrow fresh capital from them.
If money is raised from private investors, a special-purpose vehicle could be set up offshore and a portion of the countryâs tax or royalty earnings from mineral exports could be diverted into it to repay them over a number of years with interest, the person said. The SPV could also be used as a guarantee to bolster the confidence of potential lenders, they said.
Zimbabweâs main exports include platinum-group metals, gold and tobacco.
Finance Minister Mthuli Ncube and his Permanent Secretary George Guvamatanga didnât respond to calls and text messages seeking comment.
– With assistance from Godfrey Marawanyika and Ray Ndlovu.