Creating & Harvesting Real Monetary Value
From Zimbabwe’s Commercial Farmland
Tapuwa Tavaziva
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Creating & Harvesting Real Monetary Value
From Zimbabwe’s Commercial Farmland
Land Value Funds Reparations for Historical Land Injustices
Land Value Contributes to the Global Compensation Fund (GCA)
Land Value Funds Displaced Farmworkers
Land Value Funds New Farmers Start-up Capital
Land Value Funds Vision 2030 Goals
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Creating &Harvesting Real Monetary Value from
Zimbabwe’s Commercial Farmland
Problems Worth Solving
1. How to create & harvest domestic monetary value from our land and use the
proceeds to fuel 2030 Vision agricultural & economic miracles.
2. How to avoid saddling the country with a foreign debt over a product (land) that
we own and is used and traded locally.
3. How to provide freehold title to Zimbabwe citizen farmers instead of 99-year
leases while denying foreigners access to our land
The Solution
1. Allocate a value to each farm. In this proposal an average value of USD100K is
assumed.
2. The Reserve Bank of Zimbabwe (RBZ) creates and lends USD100,000 per farm to
the Land Bank of Zimbabwe
3. Government sells farms to the farmers at $60,000 per farm. This leaves each farm
with an equity of $40,000 for use by the farmer as collateral for further loan access
if needed.
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Economics Refresher - What is money and how do
governments create money?
1. Characteristics of Money (Hennessy and Jones)
• must have value,
• be durable, portable, and limited in supply,
• usable as a means of exchange, and
• must be trusted by the citizens
2. Functions of Money (Hennessy and Jones)
• means of exchange
• Store of value
• unit of account
3. Where does Government normally get money (revenue) from? (Hennessy and Jones)
• taxes,
• create money by printing notes and minting coins,
• Borrowing locally and internationally
Money is created based on assets or products produced in a given country. In this proposal the
asset/product is land. The RBZ literally creates money which it lends to the Land Bank. When the
loan is paid off, they remove the loan and money from their books and from circulation.
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THE PROPOSAL – A SELLER FINANCED DEAL
LAND SELLER = ZIM GOV
LAND OWNER = ZIM GOV • Government sells commercial
Performs Land Survey, Partition & farmland to Zimbabwe citizen farmers
Valuation of farmland only!
Average Value = $100K per farm • One farm per farmer ZIMBABWE CITIZEN FARMER
• Sale price = $60,000 • Buys 1 Farm from the government.
• Purchase Price = $60,000
• Receives $60,000 from the Land
ZIM GOV LAND BANK Bank to finance the purchase
• Writes a mortgage loan for $60,000 • Pays the $60,000 to the Zimbabwe
RBZ = ZIM GOV secured by the farmer’s farm Government, the Seller.
Provides financing on behalf of • Credits farmer’s account with
the land seller – the Zim Gov $60,000
by creating and lending • Keeps $40,000 for bank
$100,000 per farm to the Land capitalization & additional farm
Bank & participating Local Banks operations loans
• When a farmer pays off the
$60,000, the Land Bank transfers
the deed to the farmer, who now
owns the farm free & clear.
ZIMBABWE DEEDS OFFICE
• Creates Title Deeds for the
farm in the name of the ZIMBABWE LAND SALE PROCEEDS
purchasing farmer. Credited with $60,000 per farm from the
• Sends original to the Land farmer’s Land Bank loan.
Bank for loan security Total Proceeds = $60,000*Number of
(collateral) Commercial Farms
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• Sends a copy to the farmer.
The Arithmetic – Scaling up
Number of Commercial Farms (approx.) = 160,000
Average Value of each Farm = USD100,000
Loan Amount Borrowed from the Land Bank = USD60,000
Total: 160,000 *60,000 = 9,600,000,000 = USD9.6B
In ZWD: 160,000 * 60,000*87.5 = 160,000*5,250,000 = 840,000,000,000
Instead of the RBZ simply printing money and handing it to the
government, thereby creating inflation, the 9.6B is a result of farm
mortgage loans.
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Zimbabwe Land Proceeds Distribution
350B ZWD
Reparations for historical land injustices against blacks in ZWD
ZIMBABWE LAND PROCEEDS 306.25B ZWD
ACCOUNT Global Compensation Agreement in USD 3.5B USD*
*The only amount to be
• Credited with 60,000 per farm from the
paid in USD
farmer’s loan
• 160,000 * USD 60,000 = USD9.6B
87.5B ZWD
• 160,000 * ZWD 5,250,000 = ZWD840B Displaced Farmworkers Compensation in ZWD 1B USD
Exchange Rate: 1USD = ZWD87.5
96.25B ZWD
New Farmers Start-up Capital in ZWD
1.1B USD
WARNING!!!
This whole proposal will collapse if those in TOTAL = 840B ZWD
government see this as an opportunity to steal money 9.6B USD
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Protecting the Land from Foreign Ownership
• A foreigner can only buy 1 lot of not more than 20 hectares of Zimbabwe land
• Banks shall be required to sell/auction any farms they re-possess for
mortgage loan non-payment within a prescribed period so they (banks) do
not become the new owners of land. They have to sell the repossessed farms
to prospective citizen buyers.
• By law, the Land Bank will not be allowed to sell the farm mortgages to
foreigners or foreign entities.
• In addition, banks shall not raise interest rates on a loan after the loan has
been registered; even if the interest rates were to go up.
• The government shall use eminent domain to buy land needed for national
purposes like roads, dams, railways, airports, and other national priorities.
• Ban grass growing that strips top soil to send it to foreign countries for
stadium and golf course lawns.
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Positive Outcomes for Zimbabwe
• The new farmers have security of tenure – freehold title
• New farmers can bequeath the land to their children
• The new farmers have an incentive to perform so they can pay off their loans. Government does not need to
constantly ask them to perform. They have an inherent desire to perform otherwise they lose the farm.
• The economy gains US$9.6B valuation making the nation’s Vision 2030 attainable.
• You get rid of expensive government inputs to commercial farmers.
• Citizens feel secure to invest their hard earned funds into buying farms or in farm operations.
• You do not saddle all citizens with paying for land they do not own.
• Robust land sales market adding to the country’s economic value.
• Removal of land barons who take advantage of innocent buyers and sellers.
• Exponential growth of the insurance industry covering farming risk
• Exponential growth of the local farm mortgage industry
• Freeing the country from being owned by foreign lenders. Proverbs 22:7 – “The rich rule over the poor,
and the borrower is slave to the lender.” NO NEED to borrow from international lending institutions.
• Additional officers in the Sherriff’s Office to serve eviction notices on farmers who fail to pay for their farms;
boosting employment.
• Additional surveyors in the Survey office so all land in Zimbabwe can be correctly designated, boosting
employment. Agriculture land has to be used for agriculture purposes and nothing else.
• Government earns additional revenue from annual property taxes and transfer fees when farms change
hands.
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Q&A
Q. Where does the government get 9.6B in USD?
A. The government does not need all the 9.6B in USD; only the 3.5B for the GCA. The forex for the GCA 3.5B will come from export earnings.
Q. If the RBZ creates money, will this not cause inflation to rise?
A. Inflation is typically caused by creating/printing money which is not backed by real assets or products. The RBZ money advanced to the Land
Bank will be backed my farms loans/mortgages. The experts in the banking system can work out the finer details.
Q. Is there an example of where this has worked before?
A. Yes, it happens every day in the urban areas. Here is a true story. Progress Builders built core homes in Zengeza (late 70's, early 80's). The
prospective home buyers had very little cash on hand. CABS financed the construction. The home buyers then went to CABS to obtain
mortgage loans to pay for and extend their homes. CABS paid off Progress Builders and then held onto the loans for each home buyer. Over the
years, I suspect, CABS made profits from the interest the home buyers were paying. When the home owners decided to move to the low
density suburbs with the end of racial discrimination, they sold off their asset (home), used the value that had accrued over the years (equity),
to purchase new homes. No foreign currency was involved.
When a home owner has stayed in their home for several years; they can go to the bank, refinance their home and construct a cottage, or buy
a retirement home, or finance their children's education or go blow it up in Victoria Falls. You do not need forex for an asset valued and traded
locally; in this case farmland. Imports and the desire for forex has warped our minds to simple but powerful domestic economics. So, if it works
in town, why does it not work on rural commercial farms? This is happening today in all the homeownership suburbs in Zimbabwe.
Q. What is seller financing?
A. Seller financing is when the seller of a piece of property, product or service, in this case land, provides financing to the buyer of the property.
Seller financing is evident in department store credit accounts or airlines fly now, pay later. In this proposal the Zimbabwe Government is both
the seller and financier of the land purchase.
Q. Why not provide land free of charge to the new farmers?
A. The rest of the nation is constantly subsidizing the formation of a rich class of people with no tangible return to the taxpayer.
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HAMA DZANGU, NGATISAFA NENYOTA MAKUMBO ARI MUMVURA!
Bibliography
Hennessy, Kathryn: Senior Editor and Gareth: Managing Editor Jones. HOW MONEY WORKS: THE
FACTS Visually Explained. New York: Wheeler, Liz. DK Publishing, 2017.
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