NATIONALIZATION FALLOUT BEGINS

UNCLAS SECTION 01 OF 02 HARARE 001021

SIPDIS

SENSITIVE

STATE FOR AF/S
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER
USDOC FOR AMANDA HILLIGAS
TREASURY FOR OREN WYCHE-SHAW
PASS USTR FLORIZELLE LISER
STATE PASS USAID FOR MARJORIE COPSON


E. O. 12958: N/A
TAGS: SENV EAID BTIO EINV ECON PGOV ZI
SUBJECT: NATIONALIZATION FALLOUT BEGINS

Ref: A) Harare 00959


1. (SBU) Summary: The public debate over GOZ plans
to nationalize most productive farmland has begun. The
initial policy announcement was only the first salvo.
There appears to be a growing fissure within ZANU-PF over
nationalization. End summary.


2. (SBU) Ostensibly correcting Land Minister John Nkomo's
reported announcement that the GOZ intended to
nationalize all land in the country (ref A),the state-
controlled Herald's June 10 edition stated that " . . .
[the 99-year and 25-year leases] only appl[y] to land
acquired by the State under land reforms, and does not in
any way invalidate or supercede other lawful forms of
tenure . . ." A highly-placed Ndebele GOZ official told
the Embassy that Moyo, in his quest to be the top Ndebele
in Mugabe's inner circle, purposefully mischaracterized
the nationalization policy to discredit Nkomo. Other
ruling party officials have confirmed this (septel).



3. (U) Articles in the Zimbabwe Independent and Financial
Gazette from June 10th also state that the Cabinet
decided to nationalize wildlife lands to allow indigenous
firms access to these lucrative businesses. National
Parks officials are working out the implementation
details. Land and legal experts have decried the
nationalization policy, arguing that no financial
institution would invest without collateral. The Zimbabwe
Independent quotes constitutional law expert Lovemore
Madhuku that the GOZ could only nationalize compulsorily
acquired land, as the constitution guaranteed private
property rights.


4. (U) An article in the GOZ-controlled Herald's June 14
edition attempts to justify fast track land reform and
nationalization. The article traces the history of
slavery in Africa and the whites' colonization of the
most arable land. It continues through the Lancaster
House negotiations and Britain's broken promises, with
GOZ patiently waiting for 20 years before deciding to do
land reform on its own. While acknowledging, "the
process was not all that smooth and did not go according
to the desired plan", the article paints an ordered
picture where parliament passed the Land Acquisition Act
and any problems are simply "to be expected", or
happenstance. Nationalization is purportedly the next
logical step to "finally control[] all farmland just like
what [Zimbabwe's] neighbors did years ago". Mocking the
anger of white farmers, the author details how whites
moving to other African states are accepting 99-year
leases.


5. (SBU) Vitalis Chadenga, the National Parks and
Wildlife Authority's Operations Director, told EconOff
that only compulsorily acquired wildlife land would be
leased for 25 years. The National Parks asked for 99-year
leases but was overruled. Chadenga declined to say by
whom. GOZ will require current conservancy owners to give
up an undisclosed percentage of their land ownership
while remaining on the land. The idea is to have current
owners impart their knowledge and expertise about
wildlife management to indigenous partners. The land
would not be fenced into smaller lots. The GOZ will
theoretically compensate (for improvements to the land
only) any current owner who decides not to continue on
the land.


6. (SBU) Chadenga assured EmbOff that the GOZ issues and
strictly enforces hunting licenses and permits according
to international conventions. He expressed surprise at
potential investor skittishness after nationalization.
However, once challenged to explain, Chadenga admitted
that access to investment capital could be problematic,
since typical loan terms required leases longer than 25
years. He ultimately admitted that investor confidence
would be shaken and could be disrupted, but continued to
express optimism that GOZ had learned from its farm land
reform mistakes.


7. (SBU) Chadenga claims only applicants with a
commitment to wildlife conservation and wildlife industry
viability would receive leases. Nationalization will not
affect the proposed Trans Frontier Conservation Area
(TFCA) between South Africa, Zimbabwe, and Mozambique.
Settlers in National Parks and on private conservancies
would be re-settled in other areas. Chadenga also opined
that negotiated indigenization, like the proposed MOU
between Save Conservancy and Traditions, could proceed.

8. (SBU) Comment: The Herald's back and forth reporting
on land nationalization confirms the party's continued
confusion on its bread and butter land reform issue.
Mugabe's refusal to weigh-in on this and other issues
leaves second echelon rivals to thrash things out with
little resolution. Moyo's aggressive and vocal posture
reflects influence but not control over party matters.


9. (SBU) Comment cont'd: Chadenga's surprise about
investor skittishness reveals the incomplete nature of
the policy. His belief that GOZ learned its lesson from
land reform simply does not bear out. From school
closures, selective anti-corruption enforcement, and the
continuing tax on exporters, GOZ has shown no sign of
learning from past mistakes. GOZ's willingness to give
out private hunting concessions does not bode well for
controlling off-take. Sweeping high-level corruption in
the issuance of leases for hunting zones and aggressive
grabs by senior ZANU-PF officials seeking to gain a
monopoly on the lucrative safari trade, may well be the
template for what is in store for conservancies that are
currently in private (foreign) hands. It is, however,
encouraging that private deals made between conservancies
and indigenous groups may still be honored.

Sullivan