Africa Insider » Featured

The Positive Side of Land Grabs in Africa

December 8, 2011   ·   0 Comments

The Positive Side of Land Grabs in Africa

Sep 11, 2011 | Written by Editorial Staff

This year the Oakland Institute published the controversial report, “Understanding Land Investment Deals in Africa,” which stated hedge funds are acquiring land in Africa, without benefiting the people in these countries.  While the subject of land grabs may be controversial, we are going to take a look at some of the ways that they can be beneficial.

“I see the land grab as something that offers opportunity,” says Nissi Ekpott co-author of Redefining Business in the New Africa.  “Like anything in life there can be an upside and there can be a downside, depending on how the different parties involved manage it.   I am of the opinion that for the first time in the modern history of Africa value has been seen in the continent beyond resources.”

These land grabs do not refer to businesses coming in, exploiting, and leaving, a trend that has plagued Africa’s past.  Instead, companies are coming in and setting up manufacturing and agricultural factories, and in many cases, are employing a local workforce.  “Of course,” explains Ekpott, “some business deals are good and some business deals aren’t.  One shouldn’t expect 100% of the land deals that are done on the continent of Africa to be good deals.  However, checks and balances will be put in place to ensure that good deals are done – those that are beneficial to everyone.”

In many African countries (such as Angola, Zambia, Mozambique and Tanzania), there are vast areas of virgin, fertile land.  In most of these countries, little of the land is cultivated, leaving much of it untouched and ripe with potential for small and large scale agriculture.  The world’s population is growing at a rate of about 1.3%, which amounts to 3 people being born every second.  At this rate, it is not unforeseeable that a major famine in the near future could wreak havoc on our planet and leave millions without food.

“25 years from now 2 billion more people will have to be fed on our planet earth,” explains Hartmut Sieper, CEO of Trans Africa Invest and co-author of Redefining Business in the New Africa.  “More than 60% of the land that is still available for agriculture [in the world] is lying in Africa.  And in order to feed everyone on earth, we need to expand agriculture in Africa.”  While there is an abundance of available land, its potential can only be realized with very substantial investment.  This is because essentials such as modern farming equipment, seeds, irrigation, and fertilizer are needed before large-scale food production can take place.

According to Sieper, “Africa definitely needs investors from outside.  The key is to attract those investors and to create win-win situations for all stakeholders, so that neither the African people nor the African nations will be exploited. At the same time, agreements need to be structured so investors do not risk losing equipment or capital expenditures.”

Africa stands to gain more than new employment opportunities from foreign agricultural investment. In general, the continent currently imports the majority of its food from other countries, resulting in people easily paying at least 1/3 more for products that could potentially be grown locally to say nothing of potential food shortages. Africa’s potential has to be developed to reduce these situations.

Lauri Elliott, Director of Afribiz, adds “a balance has to be struck so that everyone wins. While there are issues, there are many good examples, such as Feronia in the DRC. It’s not impossible to be highly profitable in Africa while sharing the benefits with communities – in fact this is one of the keys that will unlock our future in Africa and elsewhere. There are too many political and social repercussions to do it any other way nowadays.”

Featured image is by Joe Villiers.

To listen to the Afribiz brief (15 minutes) from the full episode, click here.

Copyright 2011 Afribiz.net

Article source: http://feedproxy.google.com/~r/Afribiznet/~3/pIl9TzK9EO8/the-positive-side-of-land-grabs-in-africa

Related posts: