understanding land investment deals in africa - Oakland Institute

executive summaryOn July 9, 2011, the Republic of South Sudan (RSS)became the world’s newest nation. Despite thesignificant strides that South Sudanese have madesince the signing of the Comprehensive PeaceAgreement (CPA) in 2005, South Sudan remains oneof the least developed countries in the world. In orderto meet its developmental challenges, the governmentof South Sudan has begun promoting large-scaleprivate investments as a shortcut to rapid economicdevelopment. However, recent data about the rateat which the government is leasing land to foreignand domestic companies has led some observers toquestion whether the government’s strategy can deliveron its promises. According to a recent study, in justfour years, from the start of 2007 to the end of 2010,private interests sought or secured 5.15 million hectares(ha) of land in the agriculture, biofuels, forestry, carboncredit, and ecotourism sectors—equivalent to morethan eight percent of South Sudan’s total land area. 1As currently conceived, these land deals threatento undermine the land rights of rural communities,increase food insecurity, entrench poverty, and skewdevelopment patterns in South Sudan.After providing an overview of the economic, social andpolitical context, the report examines the following fourcase studies:• Nile Trading and Development: In 2008,a Texas-based company called Nile Tradingand Development obtained a 49-year lease to600,000 ha of land in Central Equatoria State,with the possibility of increasing its landholdingto one million ha. Nile Trading then enteredinto agreements with two other Texas-basedcompanies—Kinyeti Development and theAmerican Exotic Timber Group—to harvestvaluable timber in the area. Evidence suggeststhat the companies are using the agro-forestryventure as a means of advancing their oil, gas,and mining interests in South Sudan.• Commonwealth Development Corporation (CDC)and Finnish Fund for Development Cooperation(Finnfund): In 2007, the CDC and Finnfund, twogovernmental development funds associated withthe British and Finnish governments respectively,obtained a majority interest in several forestconcessions in Central Equatoria and WesternEquatoria states. The company that signed theconcession agreements did so without consultingeither the state governments or the affectedpopulations living in the area. In late 2010, theCDC and Finnfund reportedly sold their interestin the forest concessions to unnamed investorswithout the knowledge of the government oraffected populations.• Al Ain National Wildlife: In 2008, an Emiraticompany, called Al Ain National Wildlife, enteredinto a 30-year agreement with the government ofSouth Sudan to operate an ecotourism venture on1.68 million ha of a government-owned nationalpark. With the support of the government,the company has asked approximately 10,000to 15,000 local residents to relocate to a newlocation that is at least a distance of four hoursdrive by car. The company had pledged to provideaffected populations with a range of infrastructuredevelopments and services prior to relocating thelocal population; despite having their lease formore than three years, the company has not yetdelivered on its promises.• Citadel Capital and Concord Agriculture: In 2009,an Egyptian private equity firm called CitadelCapital, through one of its portfolio companiescalled Concord Agriculture, obtained a 25-yearlease to 105,000 ha of land in Unity State throughan agreement with the state-level government.According to the terms of the agreement, thecompany pays just USD 125,000 in annual leasepayments to the state government. Despite beinglocated on community-owned land, the affectedcommunities have not been provided with anydirect benefits under the investment agreement.The government’s support for land investments ispredicated on the myth that large-scale developmentprojects are the quickest way to improve food securityThe Oakland Institute understanding land investment deals in africa: south sudan | 2