5 December 2011

Hidden Lands - Ensuring Transparency in Acquisition and Allocation (AfDB)

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Managing land acquisitions and the interest of local communities

Land carries a powerful emotive charge in Africa. So while some welcome opportunities presented by foreign direct investment in African land, others are alarmed by a new "scramble" for post-colonial, post-independence Africa.

Africa's relatively scarce agricultural land is precious, forming only slightly more than a fifth of the continent's 3,000 million hectares. With climate change already reducing the effective use of marginal land, land-based foreign direct investment is seen as a critical issue at this "African COP."

Land-based foreign direct investment was among issues addressed by the African Development Bank, together with the African Union Commission and the United Nations Economic Commission for Africa, in their work leading to the African Union 2009 Declaration on Land Issues and Challenges in Africa and Framework and Guidelines on Land Policy in Africa, noted Dr Abebe Haile-Gabriel, Director, Rural Economy and Agriculture, African Union Commission.

"It would help guarantee the Pan-African Parliament's good legislative framework if this were supported by national legislation, creating a triple-win for government, the community and the investor," agreed Ken Johm, Division Manager, Natural Resources and Environment Management Division, African Development Bank,

Concern was expressed urgently at a Pan-African Parliament seminar earlier in 2011, noted Hon Sisa Njikelana, MP, Chair, Parliamentary Committee on Energy, Parliament of the Republic of South Africa. Two of its resolutions called for a moratorium on all such deals currently being negotiated; and that parliamentarians should be empowered to review and repeal unbalanced contracts.

"Between 2001 and 2011, 227 million hectares of land was acquired in the developing world, mostly between 2007 and 2008 and mostly in sub-Saharan Africa," said Mohamet Lamine Ndiaye, Pan-Africa Head of Economic Justice, Oxfam GB, West Africa Region. "This is when the financial crisis hit. Food prices also rose, contributing to civil unrest in Africa and elsewhere."

Foreign land investment is highest by far in Africa, said Dr Josué Dioné, Director, Food Security and Sustainable Development Division, Economic Commission for Africa, quoting International Land Coalition estimates of 71 percent, against 18 percent in Latin America and 14 percent in Asia.

"In Asia," he added, "91 percent of investors are from the region but in Africa 71 percent of deals are external. In Africa, our systems provide preferential treatment for non-African investors against internal investors or cross-border investors."

Foreign investors shrewdly target prime land, such as the Niger basin or the Nile, with good access to another scarce African resource, water, Dr Dioné noted. Wealthy food-importing countries seek to boost domestic supplies and bypass world food markets by leasing or purchasing African land.

African land is also bought to capitalise on mainly US and EU biofuels incentives. Such interest attracts speculators, too, who invest in land for future resale.

Alienating land from the African food-chain is disturbing, said Mafa Chipeta, former Coordinator for Eastern Africa of the Food and Agriculture Organisation, given Africa's plummeting contribution to world agriculture since independence and growing food insecurity. Land deals are more likely to displace from the place of their birth some of Africa's estimated 80 million small-scale farmers, added Hon Njikelana. Many are women, particularly worsening gender as well as socio-economic inequalities, as well as possibly triggering conflicts, "Something our continent cannot afford to countenance."

"Africa needs investment - but not on current terms," agreed Dr Gaynor Paradza, Senior Researcher: Land and Agrarian Reform, Institute for Poverty, Land and Agrarian Studies, South Africa.

She cited a typical bad experience of Mozambican smallholders being forced by a neighbouring foreign land investor to choose between switching to monoculture and being denied access to water. An unusually good deal sees food crops grown on French-owned Congo Brazzaville land for and by the local community. Generally, communities should benefit from revenue paid to government on their behalf, she recommended, for example receiving schools, infrastructure and agricultural extension.

Secrecy surrounding many deals also worsens relationships between communities and foreign investors, noted Dr Paradza. She praised transparency in Liberia, which publishes all its land deals on the internet.

"We're not dealing with intelligence, we're dealing with development," agreed Hon Njikelana. "Contracts must be transparent and accountable."

"Our governments are well intentioned and want their countries to prosper but we must improve our understanding of the negotiation process," said Chipeta. "An overseas company may turn up with five lawyers to face a government minister accompanied only by his aides. The minister then isn't aware he's selling off his country, which he holds in trust for the people."

"The new wave of land grabbers isn't arriving with guns and tanks," agreed Ndiaye. "They win easily because communities don't have all the information they need to make a rational decision."

Misunderstandings include how long land is being signed away for, how much land is involved and how long the compensation will support them.

"The African Development Bank's expertise can prevent a deal being skewed against community or government negotiators by empowering them through the African Legal Support Facility so they can access environmental, financial and legal expertise," advised Johm.

"Saying no to all land-based foreign investment could kill our continent but peer learning and mutual support are essential, as is broadening the AU framework and guidelines to include best practices," noted Dr Dioné. "Let us also look for ways of favouring joint ventures by African and foreign investors resulting in technological benefits to the continent with some capital remaining behind."

"We must make our own people effective players in development agriculture, enjoying tax holidays and other benefits so we also benefit from the new scramble for Africa," concluded Chipeta.

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