understanding land investment deals in africa - Oakland Institute

entity and does not represent the community ofMukaya. The Three influential natives leased theland behind the backs of the entire communityand without concerned [sic] of the ancestralinhabitants of the land. …The land of MukayaPayam belongs to the community and not to beleased out by the individuals. …The so calledcooperative of Mukaya Payam wherever it mayexist with its administration is answerable to anyissue that may arise thereafter.” 95The president and the state authorities noted thecommunities concern, assuring the community thatno investment would proceed in Mukaya without thecommunity’s consent. 96 However, the government hasnot yet publicly terminated the lease agreement. Norhave the institutions from the Central Equatoria Stategovernment that were involved with the investmentexplained how they could issue a lease over such alarge portion of land without the involvement of thecommunity residing in the area.Southern Cross Mining and ExplorationThrough his contacts in the government of South Sudanand among South Sudanese living in the diaspora,Franklin was able to transition from the agroforestryventure into several mining ventures. His company,Southern Cross Mining and Exploration, is currentlymanaging an artisanal gold operation in MoroboCounty, Central Equatoria State, which he hopes todevelop into a full-scale gold mine. Project operationshave not yet started due to the high levels of water inthe project area, but the company’s geologist has beenconducting exploration activities in order to identifyareas of potential interest. According to Franklin,Southern Cross owns a 65 percent controlling interestin the venture and the SPLA and local communitytogether own the remaining 35 percent. The projectreportedly employs six ex-SPLA personnel as guardsand project managers. According to Franklin, SouthernCross investors have already invested approximatelyUSD 150,000 into the venture.To date, there has been very little mineral explorationin South Sudan and the country’s mineral potentialis largely unknown. Since the signing of the CPA, theRSS Ministry of Energy and Mining has instituted amoratorium on mineral concessions awaiting thepassing of the Mining Bill, now under review by theMinistry of Legal Affairs. However, as Franklin’sactivities demonstrate, foreign investors are usinga variety of means to position themselves to accessSouth Sudan’s resources once the moratorium islifted. It is not only “juniors” such as Franklin that areeyeing South Sudan—South Africa-based AngloGoldAshanti, the world’s third largest gold producer, is alsointerested in expanding operations to South Sudan.Mark Cutifani, AngoGold’s CEO, was recently quotedas saying that South Sudan has “untapped potential.”According to Cutifani:“It’s that simple. When you look at the area thereare lots of historical diggings and works and lotsof smoke and in fact fire. …For us, we’ve only beenthere five minutes when you look at the time,and we’re already seeing gold. That’s why we’reexcited.” 97It is too early to determine whether South Sudan willbe able to manage its mineral resources to benefit localpopulations in South Sudan. However, the fact that thegovernment has effectively limited mining activitieswhile it develops the necessary laws and regulationssuggests that a similar approach may be appropriatefor other business sectors. Given the evidence fromthe interim period demonstrating the government’sinability to enforce its laws on private sector investmentsin agriculture, forestry, biofuels, and carbon credits, thegovernment would be well-advised to limit investmentsin these other sectors until it has had an opportunity todevelop the appropriate institutions.Commonwealth DevelopmentCorporation (CDC) and the FinnishFund for Development Cooperation(Finnfund)This case study involves investments in SouthSudan by two governmental development funds: aBritish development finance institution called theCommonwealth Development Corporation (CDC)and the Finnish Fund for Development Cooperation(Finnfund). Until recently, these two funds heldmajority interests in two companies that are engagedin timber production and harvesting in South Sudan:The Oakland Institute understanding land investment deals in africa: south sudan | 27