TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

agribusiness restructuring obtained in Senegal
relative to Ghana suggests that there exists a
higher propensity for foreign investors to trust a
business partner in Ghana than in Senegal. There
is a need to promote good corporate governance
practices in the industry in order to create a more
trust-building environment in Senegal.
Increased risks of seeing Senegal small
farmers lose available fertile land areas
Like Senegal’s other identified, diminishing natural
resources such as forests and fisheries, arable land
too is becoming a scarce productive input as a
result of a growing land demand pressure. With
3.3 person per hectare, Senegal appears as one
the most land-scarce countries relative to possible
FDI competing destinations such as Côte d’Ivoire
(1.1 person/hectare), Ghana (1.9 person/hectare)
and Nigeria (1.2 person per hectare).
As the following graphs suggest (Figure 7),
there is no free land areas readily available in
Senegal without some sort of claim or ownership
attached, suggesting the need to seriously tackle
the long- standing land use and rights issues with
measures gauged to remove this well-known FDI
related constraint. More than 3 804 900 hectares
FIGURE 7
Total land areas available in Senegal,
2008
Improper to cultivation
9 542 000
Cultivable land
3 804 900
Grassland, pastures
6 324 600
Part 4: Business models for agricultural
investment: Impacts on local development
of land were available for cultivation in Senegal in
2002 (Figures 7 and 8), of which 246 000 were
irrigable, underscoring the very tight situation at
hand for allocating the irrigable lands left among
various future uses or destinations. This matter is
to become a much more acute issue for potential
investors in general and small farmers in particular
with the implementation of the GOANA, which
foresees the unlocking of much of the cultivated
land areas already identified. Indeed, there is a long
list of FDI companies whose possible production
expansion operations may require securing
appropriate land for key future foreign investments.
In this connection, some 30 percent of the firms
or institutions surveyed in a recent global study
assessing the business climate in Senegal perceived
access to land among the most difficult obstacles
that investors face in the country 20 .
These results suggest more competition ahead
to access the increasingly scarce land space. Weak
enforcement of laws and regulations, and poor
administration by the rural councils as currently
experienced in the country all combine to create
20 African competitiveness report, see Senegal country
report, world economic forum, at www.weforum.org.
FIGURE 8
Allocation of available cultivable land areas in
Senegal, in hectares, 2002
Cultivable lands
3 804 900
Low land cultivation
30 000
Irrigable unused
187 867
Irrigable used
58 133
Rain fed cultivated
2 506 000
Rain fed unused
1 022 900
283
SENEGAL