Zimbabwe finance minister Mthuli Ncube has told sceptical farmers that his government will pay them out in hard currency for farms taken by violent mobs 20 years ago.

Speaking to CNBC Africa from Harare, Ncube confirmed that the government was negotiating with more than 4,000 dispossessed farmers to pay compensation for improvements to their erstwhile   land after a referendum gave the green light to the idea. Many farmers fear that the government will try to pay them out in discredited bonds.   

“I can assure you that this agreement is in US dollars – it will be honoured in dollars, no other currency. In terms of the process of approval there was a referendum of 4,000 plus farmers around the globe who accepted this deal,” says Ncube.

“A lot of this money will make its way back into farming.  It is a constitutional requirement the supreme law of the land Zimbabwe wants to follow the law that is what this agreement is going to do.”

Yet many former Zimbabwean farmers remain sceptical, including veteran farmer Ben Freeth. Privately, farmers feel that this is a way Zimbabwe is trying to ingratiate itself with the international finance community by giving the impression that property rights have been restored.

“It is a pie in the sky scheme as far as I am concerned. The government doesn’t have the money. The idea is to portray this as the government and farmers kissing and making up leaving Zimbabwe looking like a great place to invest – it is just an illusion,” says Freeth.

“There is a lot of concern out there no one has actually seen the agreement there is a great deal of secrecy around the deal it is all a bit mysterious.”

Farmers have also questioned the 99-year lease on farms that government is offering in a bid to kick start what was once the bread basket of Southern Africa. Ncube tried to reassure farmers.

“In terms of 99 year leases that is a different matter..the way we will do it is working with farmers  and provide a guarantee to banks  extending loans  to farmers , but we understand it take time for banks to accept 99 year leases,”says Ncube

“It is a big step in the right direction 20 years after the land acquisition was carried out. We will work together to deal with our issues.”