US embassy cable - 04HARARE959

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