Dakar, 26 March 2017 (ECA) - A recent assessment on investments in Africa’s lands by the Land Policy Initiative indicate that US$4.5 billion will be needed over the next 10 years to fix some of the key challenges identified in relation to land.
These challenges relate to developing land policies and reform institutions, improving tenure security in communal and individual lands, increasing access to land and tenure security for the poor and vulnerable, increasing efficiency and transparency in land administration and resolving land disputes and managing expropriations.
African countries have in recent years shown political will and a commitment to transform agriculture on the continent, as evidenced by the signing of the Comprehensive Africa Agriculture Development Programme (CAADP) – the continent’s overarching framework for ensuring that interventions in the sector are made systematically - by 43 countries in Africa by mid-2016.
They have also since 2000 and especially 2008, when the demand for African agricultural land by domestic and foreign investors - following the food and energy crisis – significantly increased and in a bid to attract more FDI, signed a record 685 large scale land based investments agreements (LSLBI) covering over 40 million acres of arable land. “And there is scope for more investments,” said Mr. Stephen Karingi, the Economic Commission for Africa’s Director of the Capacity Development Division.
He was speaking on behalf of Mr. Abadallah Hamdok, ECA’s acting Executive Secretary at the “Invest in Africa’s Land to Catalyse Economic Growth and Prosperity” side event held on Sunday during the African Development Week in Dakar, Senegal by the LPI
However, most of these land deals have not really succeeded in generating the investment that was envisaged. There are cases whereas minimal land is brought under production and hence the benefits do not materialize as expected or stipulated in the contracts. Assessments by the LPI indicate that only 58% of the 474 LSLBI deals signed in Africa since 2000 are operational and only 19% of the land area is under investment. Furthermore, only 8.6% of the land area under contract in Africa is productive or under cultivation.
“Some of these investments have led to the least favorable outcomes as they have deprived local communities of their livelihoods without due compensation; they have also failed to generate meaningful employment, infrastructure and other expected benefits,” said Mr. Karingi. “And, from the perspective of investors – the difficulty of doing business, volatile nature of institutional arrangements, high transaction and settling costs, are some of the reasons that have led to the failure of these investments.”
Echoing Mr. Karingi was Mr. Jonathan Ocram, speaking on behalf of the Director, Department of Rural Economy and Agriculture of the African Union Commission. He noted that land governance constraints form one of the primary obstacles to attracting investment in Africa.
“Customary land tenures which embed a lot of nested rights abound on the continent, inappropriate land investment models some of which have failed, historical injustices and legacy issues as well as inefficient land markets have constrained our abilities to attract the requisite investments to boost our social and economic development,” he added.
During the panel discussions that ensued, participants that it had become crucial for African countries to rely and draw on instruments such as the AU Declaration on Land Issues and Challenges, and the Framework and Guidelines on Land Policy in Africa, the tripartite initiative of the African Union Commission, the United Nations Economic Commission for Africa and the African Development Bank – which contain guiding principles on large scale land based investments.
They agreed they served as a useful tool and reference to guide member states as well as investors in negotiating sustainable investments in land.
The guiding principles note the importance of contextualizing these investments within the existing strategy for agricultural development, recognizing the centrality of smallholder producers to ensure their interests are safeguarded by investment models that minimize land transfers and lead to shared prosperity at local and national levels.
Note to editors:
The Land Policy Initiative is a joint programme of the tripartite consortium consisting of the African Union Commission (AUC), the African Development Bank (AfDB) and United Nations Economic Commission for Africa (ECA). Its purpose is to enable the use of land to lend impetus to the process of African development.
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