GOZ ANNOUNCES INTENT TO NATIONALIZE LAND

C O N F I D E N T I A L SECTION 01 OF 03 HARARE 000959

SIPDIS

NSC FOR SENIOR AFRICA DIRECTOR J. FRAZER, D. TEITELBAUM
INTERIOR FOR USFWS - SHEILA EINSWEILER
LONDON FOR C. GURNEY
PARIS FOR C. NEARY
NAIROBI FOR T. PFLAUMER

E.O. 12958: DECL: 06/09/2009
TAGS: EINV PGOV ECON EAGR SENV PHUM ZI
SUBJECT: GOZ ANNOUNCES INTENT TO NATIONALIZE LAND

REF: (A) HARARE 939 (B) HARARE 862

Classified By: Political Officer Win Dayton under Section 1.5 b/d


1. (C) SUMMARY: GOZ media reports that the GOZ is prepared
to nationalize the country's farmland and conservancies --
essentially limiting land use to limited term leasehold
arrangements -- may be somewhat premature. While a leasehold
system appears to be the ruling party's objective, resolution
of crucial details within the ruling party will likely prove
complicated, time-consuming and potentially divisive. In any
event, the GOZ continues to appear determined to reduce white
ownership in the agricultural sector further, if not
eliminate it entirely. END SUMMARY.

99 Years for Farmland; 25 for Conservancies
--------------


2. (U) According to the June 8 cover story in the
government's Herald newspaper, the GOZ plans to abolish title
deed holdings and replace them with 99-year leases. Wildlife
and game conservancies would be subject to leaseholds of no
more than 25 years. Urging all land owners to come forward
for vetting in order to qualify for leaseholds, Minister of
Special Affairs in the Office of the President and Cabinet in
charge of Land Reform and Resettlement (and ZANU-PF
Secretary-General) reportedly called existing processes for

SIPDIS
state land acquisition "odious and unnecessary because in the
end all land shall be State land and there will be no such
thing as private land." The article asserted that Zimbabwe
was one of only a few African countries not already using a
land nationalization/leasehold model. It noted also the
listing June 4 of 259 additional farms for compulsory
acquisition, bringing the total this year to 918. (Note:
Commercial Farm Union representatives estimated to us in
April that about 650 white owned commercial farms remained in
operation, although many were fractions of their former size
due to partial land seizures or settlements. End Note.)

Details to be Worked Out
--------------


3. (C) Permanent Secretary Pazvakavambwa of Minister Nkomo's
office told poloff emphatically on June 8 that comments
attributed by the Herald to Nkomo were inaccurate. He
confirmed that the GOZ was heading toward a long-term
leasehold system in accordance with recommendations of last
year's Utete Commission Report, but asserted that the Cabinet
had not agreed yet on the timing or mechanics of
implementation. Director General Mtsambiwa of the Parks and
Wildlife Management Authority declined to comment to econoff
until the full policy had been released.


4. (C) An NGO representative who works closely with the
Parliament told poloff June 8 that Parliament was not
consulted on the move and had seen no draft legislation on
the matter. He said that, canvassed informally about the
measure, ruling party MPs exhibited a very shallow
appreciation of the measure's potential implications and did
not see past the fact that the 99 year term would more than
cover their intended tenure on farms received under land
reform. Opposition MPs already are denouncing the move,
which MDC President Morgan Tsvangirai characterized in his
weekly letter to the nation as reckless, unconstitutional,
inefficient, and anachronistic.

Doom for Conservancies?
--------------


5. (SBU) The notion of 25-year lease terms for conservancies
has raised alarm among environmentalists and conservancy
interests. Charles Jonga, Director of the CAMPFIRE
Association (which manages environmentally sensitive areas
adjacent to national parks) expressed concern to econoff that
such limited terms would drive away and keep out responsible
investors, who could not expect adequate returns on their
investment. Similarly, financial institutions were unlikely
to regard short-term leases as adequate collateral for
necessary loans. Short term leases further would induce
rapid extraction of wildlife resources, thereby undermining
prospects for sustainable management. He also asserted that
new owners lacked the experience necessary for wildlife
management and the trust relationships with customers
necessary to make the conservancies viable concerns.


6. (SBU) Jonga's sentiments echo those voiced previously by
Weldon Schenck, an American with property interests at the
Save Conservancy (ref A). The consortium of interest-holders
at Save has been negotiating with an indigenous company for
indigenization of the property's ownership and operation
based on shareholder equity in a deal that would have to be
approved by the GOZ. We have not yet been able to contact
Mr. Schenck for his reaction to the announced policy and its
potential impact on the Save negotiations. (Note: Minister
Nkomo has played a role in brokering among the parties to the
Save negotiation; he told the Ambassador earlier this year
that the GOZ would likely institute 99-year leaseholds for
conservancies like Save.)

Comment
--------------


7. (C) Moving on formal nationalization of land represents
just the next step in the ruling party's aggressive efforts
to bring the nation's economic assets under party control.
With the collapse of the commercial agricultural sector,
conservancies -- one of the economy's few remaining
profitable sectors and a generator of foreign exchange --
were an obvious next target, even though the Utete Commission
Report recommended against their inclusion in land reform.
Senior GOZ and ruling party officials, including some already
under USG financial sanctions, are jockeying for position to
enter the sector. The extent to which such officials take
financial interests in the industry will have implications
for our financial sanctions here. (Note: Americans
historically have been the principal market for Zimbabwe's
hunting sector. End note.)


8. (C) Commercial farmers had hoped that the polished
Nkomo, generally regarded as a relative "moderate" within the
party leadership, would rationalize land reform after getting
the portfolio from "hard-liner" Minister of Agriculture
Joseph Made in January's cabinet reshuffle. The alleged
misquoting of the Minister by the official media suggests the
mischievous hand of hard-line Information Minister Jonathan
Moyo, but may simply reflect disingenuousness by Nkomo's
office, which is well-known for trying to please
interolocutors from all sides. Nkomo's public comments may
have been intended to dampen criticism from the Moyo-Made
hardline axis (ref B) and to maintain his position. In any
event, the announcement (and new listings for compulsory
acquisition) further underscores that there will be little if
any room for residual pre-land reform operators in Zimbabwe's
agricultural sector.


9. (C) The commitment to nationalization/leasehold
arrangement squelches hopes that "new farmers" will get title
deeds to their land, a measure regarded by some as a first
step necessary to begin to rationalize the agricultural
sector after redistributive objectives were achieved.
Continuing legal challenges by existing title-holders
effectively precluded the GOZ from moving to issue reliable
new titles to recipients of property under land reform.
Nationalization will dispense with the cumbersome and
time-consuming legalistic process -- heavily criticized by
the ruling party (and usually ignored by enforcement
authorities in any event) -- required for compulsory
acquisition under current law.


10. (C) State ownership of the land and a revocable leasing
system will effectively give the ruling party additional
leverage over the individual ministers, military officers,
civil servants, judges, and party supporters who received
property under land reform. While a title deed system would
spare these tens of thousands of beneficiaries that measure
of control and would significantly empower them economically,
it is unlikely they could meaningfully influence resolution
of pivotal issues even if they wanted to.


11. (C) It is unclear how long the nationalization process,
which will require enabling legislation and implementing
regulations, will take. Although the ruling party's control
of parliament assures that it will get what it wants,
critical details of what it wants remain unclear. The
measure almost certainly will face legal and constitutional
challenges. Furthermore, it would wreak havoc in Zimbabwe's
already debilitated financial sector, where title deeds
collectively are the most significant asset collateral on
many banks' balance sheets. Finally, contention over
complicated associated issues may expose and deepen rifts
among increasingly fractious ruling party interests, some of
whom already have been sparring over allocations under land
reform. Settling land reform issues within the party may yet
prove as vexsome if not more so than overcoming opposition to
land reform outside the party.
WHITEHEAD