(Ecofin Agency) - This compensation is part of Zimbabwe's efforts to rebuild trust with investors and start fresh negotiations with creditors, supported by the African Development Bank and former Mozambican President Joaquim Chissano. The goal is to restructure its debt, which equals 81% of GDP, and reconnect with the global financial system.

Zimbabwe has announced plans to pay $331 million to 439 white farmers who were expropriated in the 2000s. This move aims to repair its global financial reputation and break free from a 20-year economic deadlock.

The announcement, made on November 25 by African Development Bank (AfDB) President Akinwumi Adesina, is part of efforts to restructure Zimbabwe’s $21 billion national debt, most of which is in arrears. Of this total, $12.7 billion represents external debt.

Initial payments could begin this year, starting with $35 million allocated in the national budget. Compensation will be paid through bonds, though specific timelines have not been disclosed, according to Adesina, who spoke during a debt conference in Harare.

Zimbabwe’s controversial land reform under former President Robert Mugabe redistributed land owned by white farmers to Black citizens. While intended to address historical injustices, the policy caused a collapse in agricultural production and cut Zimbabwe off from international financing. The plan to compensate former farm owners signals a shift and, experts say, could help Zimbabwe improve relations with creditors such as the World Bank, the IMF, and the Paris Club.

Since last year, President Emmerson Mnangagwa (pictured) has ramped up efforts to restore investor confidence. He enlisted Akinwumi Adesina and former Mozambican President Joaquim Chissano to lead debt talks. Zimbabwe has also hired international advisory firms like Global Sovereign Advisory and Kepler-Karst to assist with debt restructuring.

However, the compensation plan has sparked criticism. Some argue it prioritizes former white farmers over addressing the severe economic hardships faced by the majority of Zimbabweans. Adesina defended the move, calling it a necessary step for progress. “No one, no matter how strong, can run up a hill with a backpack of sand on their back. We can all agree that we must play our part to correct this anomaly by giving a new lease of life to this nation and its people,” he said.

Zimbabwe’s $21 billion debt and prolonged arrears have left it shut out of financing from global institutions like the World Bank and the IMF. Unable to access international markets, the government relies heavily on its central bank to fund its needs. This has fueled hyperinflation and worsened living conditions for the country’s population.