US Congress Moves to Lift Zimbabwe Sanctions

A new bipartisan bill in the US Congress seeks to repeal ZDERA (image source)

A bipartisan bill introduced in the US House of Representatives seeks to repeal the 24-year-old Zimbabwe Democracy and Economic Recovery Act (ZDERA), potentially unlocking new loans and debt relief for Harare provided it honours land-reform compensation commitments tied to the Global Compensation Deed.

The Department of State Policy Provisions Act, tabled on 16 September, explicitly repeals ZDERA, which since 2001 has blocked Washington from supporting any IMF or World Bank lending to Zimbabwe. Under the draft law, new or expanded multilateral funding will only proceed if Harare settles its US $3.5 billion arrears to former commercial farmers within 12 months, adjusted for inflation, and pays in cash rather than Zimbabwe-issued securities.

Finance Minister Mthuli Ncube hailed the proposal as an opportunity to re-engage with international lenders. “We welcome any measure that reopens our access to development finance, provided it respects our land reform achievements and the dignity of all farmers,” he told delegates at an AfDB side event in Abidjan in May, where he confirmed that over US $20 million in compensation had already been paid out in bonds and small cash payments.

“ZDERA was not a mere law – it was a noose around our economy,”says commentator Dereck Goto.“Repeal may finally free Zimbabwe from decades of economic strangulation.”

Under the proposed repeal, the US would only support fresh IMF or International Bank for Reconstruction and Development funding if Zimbabwe commits to remit all outstanding arrears under the Global Compensation Deed within a year and rejects compensation in the form of domestic securities. The bill stipulates immediate withdrawal of US support if Harare backtracks on these conditions.

The original ZDERA mandate emerged in response to Zimbabwe’s fast-track land reform programme, which saw more than 4,000 white commercial farmers dispossessed around 2000. Critics of ZDERA argue it conflated property restitution with human rights and democratic benchmarks, prolonging Zimbabwe’s isolation even as Mugabe’s successor Emmerson Mnangagwa professed reform intentions in 2018.

“This legislation acknowledges the true impetus behind ZDERA – land – and seeks a more targeted remedy,” says political analyst Lenin Ndebele. “It strips away the pretext of governance conditions and focuses squarely on resolving the compensation legacy.”

However, not all observers are convinced. Political commentator Elton Ziki cautions that Washington’s insistence on cash over bonds effectively penalises Zimbabwe’s thin fiscal space. “Once again, the US dictates the form of our economic recovery,” he argues, urging Harare to negotiate terms that balance both farmers’ rights and macro-stability.

International lenders have historically been constrained by ZDERA, forcing Zimbabwe to rely on expensive commercial financing and bilateral borrowing. A repeal could unlock concessional rates for infrastructure projects, agro-processing plants and climate adaptation programmes, but only if Harare demonstrates consistent debt-servicing capacity and transparent use of funds.

Agriculture analysts warn that unless the compensation conditions are practicable, rural credit lines may remain out of reach. “Smallholder farmers need working capital now,” says Dr Phillis Matonhodze of the University of Zimbabwe’s Agrarian Studies Unit. “Protracted legal disputes over past debts risk undermining present productivity gains.”

The bill has been referred to the House Foreign Affairs Committee, where hearings are expected next week. Pro-repeal advocates hope for swift passage before year-end, while sceptics foresee intensive lobbying by commercial farmer associations in the US. If approved by the House, the repeal must clear the Senate and secure presidential assent.

Even with congressional backing, implementation hinges on coordination between the US Treasury, State Department and international financial institutions. Zimbabwean officials are preparing a detailed compensation roadmap to present at upcoming World Bank and IMF autumn meetings in Washington.

As the debate unfolds, stakeholders on both sides will watch whether the repeal becomes a catalyst for Zimbabwe’s economic reintegration or yet another conditionality that yields limited relief.