understanding land investment deals in africa - Oakland Institute

INTRODUCTIONAround the world, fertile land is being made availableto investors, often in long-term leases and at giveawayprices. This trend, often referred to as “land-grabbing,”gained traction after the global food crisis of 2008. 2Corporations, fund managers, and nations anxious tosecure their own future food security have been scoutingout and securing large landholdings for offshore farmsor just for speculation. Increasingly, investors havecome to see farmland as a secure and profitable placefor their capital. Some countries, particularly in Asiaand the Middle East, recognized their own shortage ofland or water resources for food production and beganlooking offshore for arable land—often in Africa—toassure their future food security. New quotas for theuse of agrofuels in the European Union and the UnitedStates have also contributed to the global land rush ascorporations began scouting out the vast land (andwater) resources needed to produce crops that can beconverted to fuels.By the end of 2009, such investment deals covered 56million ha of farmland around the world. 3 The UnitedNations Food and Agriculture Organization (FAO)has suggested that this can engender a “win-win”situation for private investors and host communities, 4and the World Bank has laid out a set of principles for“responsible agro-investment” that in theory, couldmake this the case. 5 Civil society and human rightsgroups, smallholder farmer associations and manyscientists disagree. They argue that the land-grabbingthreatens the food security and human rights of localpopulations. They call instead for investment in andsupport for smallholder agro-ecological farmingsystems. 6As a newly independent nation emerging from decadesof civil war, South Sudan provides a unique glimpseinto large-scale land investments in a transitional,post-conflict state. For 22 years, the North-South civilwar severely restricted public and private investmentin the region. The little infrastructure that existedwas concentrated in a handful of towns and severelydegraded by the years of war. When the ComprehensivePeace Agreement (CPA) ended the war in 2005, therewas only a single seven mile-long paved road in all ofSouth Sudan. 7These circumstances began to change quickly afterthe signing of the CPA. Private investors flocked toaccess new markets and business opportunities in thecountry. Large-scale land investments were particularlyattractive, given South Sudan’s large size, lowpopulation density, and impressive natural resourcewealth. Private sector actors found eager partners inpublic officials and community elites, many of whomview foreign investment as a “silver bullet” that can solvethe country’s problems of underdevelopment, poverty,and food insecurity. The end result was astonishing:According to a recent study, in just four short years,from the beginning of 2007 to the end of 2010, privateinvestors sought or secured approximately 5.15 millionha of land—comprising more than eight percent ofSouth Sudan’s total land area. 8Across the board, these investments display seriousshortcomings in terms of a lack of communityparticipation and one-sided contracts that stronglyfavor the private investor. Companies rarely negotiateinvestment agreements directly with landowningcommunities or their legally empowered representativesas required by the 2009 Land Act, preferring insteadto enter into bilateral agreements with governmentministries. 9 Many projects also involve long-term leasesof up to 99 years, despite government regulationslimiting foreign investments to much shorter terms. 10Government institutions often give away large tractsThe Oakland Institute understanding land investment deals in africa: south sudan | 5