Land Deals in Africa: The Pros and Cons

With almost half of the world’s unfarmed land located in sub-Saharan Africa, foreign investors are increasingly interested in land deals in African countries.

Global-Farms-Race

“The Global Farms Race” looks at the actions foreign countries are taking now to increase future food security, such as making overseas land deals in places with uncultivated land.

Cover Courtesy Island Press

Content Tools

As the world population nears 9 billion, the global food crisis has entered a new phase. The Global Farms Race (Island Press, 2013) edited by Michael Kugelman and Susan Levenstein examines the future of food security and the actions wealthy countries are taking to secure access to farm land. In this excerpt taken from the introduction, learn how land deals in African countries can have implications on both the host country and the investor. 

Africa is the biggest hotspot for overseas land acquisitions. Of the 203 million hectares of farmland cited by the ILC, 134 million are in Africa. While many of these acquisitions have occurred in the years following the 2007–8 global food crisis, the World Bank calculates that acquisitions totaled nearly 10 million hectares in just four African countries (Ethiopia, Liberia, Mozambique, and Sudan) during the relatively early period of 2004–9. None of this is surprising when one considers that, according to the World Bank’s 2011 study, of the world’s 445 million hectares of unfarmed land “suitable for cropping, nonforested, nonprotected, and populated with less than 25 people per square kilometer,” more than 200 million hectares are in sub-Saharan Africa.

Paradoxically, many African countries relinquishing their farmland are so acutely food-insecure that they depend on aid from the World Food Program (WFP). Ethiopia, for example, has received $116 million in WFP food aid—even while Saudi Arabia has grown grains on Ethiopian farms for Saudi consumption. Meanwhile, Sudan has received “a billion pounds of free food” from international donors, yet has still managed to grow wheat for Saudi Arabia, tomatoes for the Jordanian Army, and sorghum—a Sudanese staple—for camels in the United Arab Emirates.

However, there is another side to this story. In 2009, the head of Emergent Asset Management, one of the most active private investors in southern African land, informed the BBC that “we are not bringing in our own farm workers and then taking the food and exporting it.” Instead, local communities will benefit from new farming techniques, seeds, technologies, and the “above-average wages paid by Emergent’s local partner.” In 2011, IIED researchers managed to secure contracts for 12 land deals in Africa. They found that several contained beneficial terms for local communities—one in Mali applied international environmental standards, while several in Liberia contained explicit investor commitments on employment and training. And several years after the Daewoo debacle, researchers discovered that land deals in Madagascar are emphasizing school building and clinic construction.

Regardless of the nature of foreign land acquisitions in Africa, an essential fact remains: African land is highly contentious. “More so perhaps than on any other continent,” writes Senegal-based agricultural-commodities exporter Chido Makunike, “so many livelihoods, and entire cultural and economic experiences, are directly tied to the land.” These strong ties, he explains, “engender a strong sensibility about land that is poorly understood by many non-Africans.” His contribution describes these sentiments about land in Africa, and argues that failing to understand them will make successful agribusiness projects in the region unlikely. For example, if foreign investors target what to them appears to be empty land but is in fact a community’s ancestral burial ground, then “passion and resentment” will ensue.

Additionally, Makunike describes the large-scale agriculture model as “Africa-dismissive.” Millions of smallholders are seemingly ignored, while capital, expertise, and sometimes even managers and workers are imported from overseas. He cites case studies from Sierra Leone and Mozambique, where investors’ promised jobs to smallholders have not materialized, and from Ethiopia, where an Indian firm is using Ethiopian land to produce food for export that was previously used to raise Ethiopia’s staple crop. The “presumption,” according to Makunike, is that other than the land itself, “the African side has nothing to bring to the table.” It is this “dismissive attitude” of foreign investors that not only prompts “worry and resentment” about land deals in Africa, but also “endangers their longevity and ultimate political and social viability.”

Nonetheless, Makunike does not necessarily object to foreign investments in agriculture. On the contrary, he suggests that when local communities “can be shown and convinced” that the commercial use of land “would definitely and significantly improve community well-being,” then the investment is a wise one. Makunike is cautiously supportive of contract farming, noting that it offers African smallholders income opportunities while giving them the flexibility to grow their own crops on the side. The biggest question is whether investors would have the patience to offer training and assistance to their smallholder partners—given that time-pressed investors “are used to having large groups of tightly controlled laborers who are hired and fired at will.” If land deals are done right, concludes Makunike, local communities will see their interests “tied up with the success” of the investment—a tremendous benefit for the investor.

From Global Farms Race by Michael Kugelman and Susan Levenstein. Copyright © 2013 Michael Kugelman and Susan Levenstein. Reproduced by permission of Island Press, Washington, D.C.