Carlos Lopes

Africa Cheetah Run

The Former Executive Secretary's Blog

Governance and Large Scale Agricultural Investments in Africa

17 November 2014
Governance and Large Scale Agricultural Investments in Africa

Smallholder producers, who are most directly dependent on ecosystem services, are critical agents for the future of agriculture in Africa. They contribute to poverty reduction and food security, especially in the rural areas. Disappointingly, they are often excluded from debates on agricultural investments. This exclusion has become more pronounced in the debate on Large Scale Land Based Investments.

Africa currently contributes 45 per cent of all the Large Scale Land Based Investments globally, followed by Asia at 37 per cent.  The top ten countries in Africa targeted by local and international investors account for 70 per cent of concluded land contracts and 54 per cent of Large Scale Land Based Investments deals on the continent. The majority of cases in Africa are driven by foreign based investors representing 73 per cent of the deals. The high interest in these investments is principally driven by global challenges in food security; although industry, forestry, conservation and tourism play an important role.  The combined investment in agriculture and livestock totals 87 per cent of all cases.

Despite the high Large Scale Land Based Invests in agriculture, not much land is utilized to grow food crops. Large scale agricultural investments in biofuels and other industry related crops take up a substantial chunk of fertile land. Yet if Africa is to be food secure, most of the agricultural land ought to be dedicated to food crops.

Granted, large scale crop production, agro-industry and agri-business do provide an opportunity to address Africa’s yield gap and enhance job creation among the youth. They are also likely to increase intra-Africa trade and improve infrastructure, mechanization, productivity and access to markets. But the investments are also replete with risks because the acquisitions are occurring within a governance and policy framework that is substantially facilitative of foreign investment and minimally of local community interests.

Without sustained multi-stakeholder involvement in decision making, respect for human and property rights, monitoring of the investments as well as accountability and transparency in the land deals, there is the risk of water sources being jeopardized, family farming and smallholder food production being subverted, and the land rights of local land users undermined.  It is crucial that a balance is maintained between market needs and developmental, environmental and social interests.  Smallholder producers are key to this process.

African countries have an opportunity to anchor agriculture in the national agenda. The commitment under the 2003 Maputo Declaration to increase public spending on agriculture to a modest 10 per cent of their national budgets and raise agricultural productivity by at least 6 per cent is yet to be met. On average, public expenditure allocated to agriculture accounts for slightly over 5 per cent. This under-investment in agriculture by African governments has created an environment for uncoordinated investment in land.

The success of large scale agricultural investments on the continent will largely depend on the extent to which key land governance and policy reforms are undertaken by African countries. At the core of these reforms is an inclusive land tenure system. It would not only buttress the land rights of local communities, women and youth but also increase economic development, promote gender equality and inspire younger women and men to take up agricultural activities. An inclusive land tenure system would also improve efficiency of land use and climate change mitigation and contribute to Africa’s economic transformation.

Fortunately, a number of countries have set up processes for the formulation and implementation of land policies that would make land tenure systems more inclusive and secure. The African Union Commission, Economic Commission for Africa and African Development Bank’s Land Policy Initiative is the institution that has been mandated by African Heads of State and Governments to galvanize support for land policy formation, implementation, and monitoring.  To ensure systematic discharge of its mandate, the Land Policy Initiative is guided by the African Union Declaration on Land Issues and Challenges in Africa which calls for the application of the Framework and Guidelines on Land Policy in Africa in land policy processes.

When African States invest in effective land management and use, in accordance with the recently adopted Guiding Principles on Large Scale Land Based Investments, they increase the opportunities for meeting the food needs of their populations, reduce poverty and accelerate structural transformation of rural economies. Also, by refocusing energies to improving lives in rural areas through secure tenure, increased access to land, comprehensive land use planning and zoning, and innovative agricultural practices, a crucial step is made towards sustainable development.  

This article was published by the Mail & Guardian on 13 November 2014