The staggering cost of land reform in Zimbabwe
Farmers Weekly 1 June 2018
Global Insight
By Dr Tinashe Kapuya
Dr Tinashe Kapuya is an agricultural economist. Email him at [email protected]
As the debate on expropriation without compensation rages on, there are interesting facts from Zimbabwe that continue to point to the need for a cautious approach from government.
In a previous article by Prof Johann Kirsten and Wandile Sihlobo, it was noted that the resolution by the ANC to expropriate land without compensation came at a time when the Zimbabwean government had formally implemented a process to backtrack its own process of land redistribution.
A compensation committee had been established to now compensate white commercial farmers who lost property in what has been largely described as a chaotic land redistribution exercise.
This clear shift in policy belies political statements that suggested that land reform in Zimbabwe was a closed chapter. It is not. The process of compensating farmers could take years, or even decades, while the costs continue to affect current and future generations of Zimbabweans.
ZIMBABWE HAS SPENT R38 BILLION ON GRAIN IMPORTS SINCE LAND REFORM STARTED
In terms of costs, a recent article quoted renowned and respected economists, who pointed out that Zimbabwe had lost a total of US$17 billion (R213 billion) in potential earnings over the past 17 years, due to a combination of factors directly linked to the fast-track land reform programme.
Agricultural production was lost due to stalled farming operations, destruction and rampant theft of farming infrastructure, such as irrigation equipment, and the disruption in agricultural exports, including the wrecking of export-driven supply chains. All this led to declining output revenue that could have helped to maintain economic stability, created new jobs, and strengthened the sector’s contribution to overall growth.
THE TRUE EXTENT OF THE LOSS
But R213 billion understates the true extent of the cost of fast-tracking land reform. Zimbabwe did not just lose out on earnings from timber, cotton, tobacco, wheat, fresh flowers and other commercially produced crops, it also paid a heavy price through exceptionally high levels of agricultural imports. This was particularly true of food products for which the country was traditionally a surplus producer.
Zimbabwe has become the largest importer of maize in the region, and currently produces levels of wheat that it used to produce in the early 1960s.
The country has spent at least US$3 billion (R3S billion) on grain imports since the fast-track land reform programme started. This brings the costs from export revenue lost, plus increased imports, to US$20 billion (R250,8 billion). With former white commercial farmers claiming compensation in the region of USS9 billion (R112,8 billion), the direct cost of ‘fast-tracked’ land reform in Zimbabwe is thus about US$30 billion (R376,2 billion).
This estimate, of course, excludes lost job opportunities both within the agriculture sector and through direct and indirect linkages to the manufacturing sector, not to mention the broader effects of general food insecurity, stunted economic growth, falling average incomes, and the collapse of social and economic services. Such costs are difficult to quantify, or in some cases, difficult to even attribute to land reform.
What is clear, however, is that the costs are quite staggering, and these can lead to an inter-generational crisis that the country might not be able to resolve easily.