African land deals: Is a policy shift underway?

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15 July 2013

African governments have played a key role in allocating land to investors. Recent developments hold out promise for more carefully thought out approaches by them in the future.

Oxen plough a field in Ethiopia.

As ‘land grabbing’ in Africa continues to stir public debate, a more fine-grained understanding of its features and what’s driving it, and the role of public policies is rapidly growing.

For a long time, much attention focused on land acquisitions by companies from China and the Gulf, and on a narrative about ‘feeding the world’. But it is now clear that many deals are led by Western companies wanting to capitalise on a growing demand for energy and commodities in Europe and North America.

Also, much attention has focused on transnational deals. But evidence suggests that, for most people in rural Africa, the squeeze on their landholdings is caused by a less visible, longer-term process of land acquisition by local and national elites.

Land acquisition processes are themselves evolving rapidly. New deals are being signed, amended, suspended or cancelled. Companies acquiring land are being restructured, renamed or sold. This situation makes it difficult for observers, activists and policy makers to keep track of the phenomenon.

Importantly, public policies can also shift. Because policy plays a central role in promoting and shaping large land deals, policy changes deserve particular attention.

A tale of two parties

Take the role of African governments in deal-making. Talk of ‘land grabbing’ suggests that companies are appropriating land unilaterally. But land acquisitions typically involve contracts, and contracts involve two parties.

In many African countries, it is typically governments that sign the deals and make land available to investors. In fact, many governments are vying to attract investment, and some governments have made public offers of land to prospective investors.

Back in 2009, the Ethiopian government was reported to have earmarked 1.6 million hectares of land, extendable to 2.7 million, for investors willing to develop commercial farms. Similar announcements have been made elsewhere too, and several countries have taken steps to establish ‘land banks’ that can facilitate enterprise access to ‘idle’ land.

A policy imperative to attract foreign investment so as to modernise agriculture, create jobs and promote economic development has been a key driver of these government measures. They are based on widespread perceptions that much of the land is ‘empty’, and that agricultural modernisation through large-scale, mechanised farming is the best way to drive national development. But do these models work?

There is strong demand for investment in many contexts. But after clinching the deals, many ventures have collapsed as a result of difficulties in financing and implementation. Others have met opposition at the local level and triggered vocal civil society campaigns. There have been widespread reports of inadequate local consultation, non-compliance with legal requirements and conflict. Despite the many large land deals signed in recent years, success stories are difficult to come by.

A major problem is that affected people have little control over what is happening – because they have weak and insecure land rights, the deals are being signed over their heads, the necessary social and environmental safeguards are not in place, the full range of possible investment models are not being properly considered, and many deals do not respond to local aspirations.

Small-scale farmers – the main source of agricultural investment in Africa – risk being marginalised.

Towards a new wave of government policies?

Recent developments suggest that a shift in policy may be underway. Some governments have announced partial or total halts to large land deals, for example in  Ethiopia. In Tanzania, the government has announced ceilings on the size of new land deals – a maximum of 5,000 hectares for rice and 10,000 hectares for sugarcane.

Also, some governments have become stricter in their scrutiny of investment proposals, and in terminating deals that do not comply with prescribed terms. In many countries, it is now more difficult for companies with little capital and non-existent track-records to be given large areas of land with few strings attached.

The trend is not unique to Africa. Moratoria on large land deals have also been enacted in Laos and Cambodia, for example.

Not all countries have taken similar measures, and it is difficult to assess how many will follow. Also, announced moratoria are not always implemented. But this does reflect a more cautious approach by African governments to allocating land to investors.

Improving land governance

Much else has changed compared to just a few years ago, when the ‘land grab’ story started to unfold. An African Union-led Land Policy Initiative is working to improve land governance in the continent, based on a mandate and framework from African leaders.

Widely endorsed international guidance is now available, particularly the FAO Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security.

There are more opportunities for civil society to scrutinise land contracts and to advocate for changes. Initiatives such as the Land Matrix help build momentum, awareness, partnerships and citizen engagement.

There is also stronger evidence that it is possible for agricultural ventures to work with local farmers and minimise land acquisition, and that well-thought out policies can make a real difference in enabling more inclusive investment models.

Looking ahead

This is not to say that campaigners should lower their guard. Many controversial land deals that governments have signed over the years are still in force. New deals are still being signed, albeit with less publicity. On current trajectory, the global economy will require more resources, not less, so demand for Africa’s land is unlikely to go. And the structural policies that undermine local control, such as weaknesses in land rights and consultation requirements, have not been addressed.

But the recent shifts in government policy are a promising sign that, in some countries at least, there may now be more space to consider a wider range of investment models that better respond to local and national aspirations. So, in addition to campaigning and public scrutiny, there is also a need for constructive dialogue on possible ways forward.

Making this happen would require contributions from different players:

  • producer organisations helping their members have a voice
  • NGOs keeping up the pressure and seizing the new policy openings
  • development agencies working to strengthen the capacity of government, producer organisations and civil society where this is needed
  • companies developing more imaginative business models that include local farmers and
  • research supplying the analysis to create informed debates.

Governments concerned with ensuring that investment responds to local and national aspirations should avoid rushed large land deals and increase local control over investment processes. These governments can show leadership by facilitating the emergence of a shared, bottom-up vision of national development, which should guide decisions on what types of investment to promote, where and how.

Governments can also design and enforce legislation to protect local rights, increase opportunities for local voices to be heard, restructure incentives in favour of more inclusive investment models, ensure that social and environmental considerations are fully factored in, and hold investors to account on their promises.

This leadership will be central to any policy efforts to promote more inclusive investments.

Find out more about Lorenzo Cotula's new book: The Great African Land Grab?

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