Investment flows to sub-Saharan Africa
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Transcript Investment flows to sub-Saharan Africa
Large-scale land acquisitions for agricultural investment
in Africa:
Trends and issues
Lorenzo Cotula
(and Sonja Vermeulen, James Keeley, Rebeca Leonard,
Berhanu Adenew and Moussa Djiré)
International Institute for Environment and Development (IIED)
Setting the scene
Spate of media reports worldwide yet little systematic
empirical data
FAO/IFAD/IIED study; IIED involvement in World Bank-led
study
“What”: trends and drivers; and “how”: characteristics
of land deals, land access impacts – focusing on
government-partnered investment and on sub-Saharan
Africa
Ongoing literature review, qualitative interviews,
quantitative inventories in 6 countries (Ethiopia, Mali in)
Limitations
Outline
1.
“What”: Trends and drivers
2.
“How”: Characteristics of land deals
1.
“What”: Trends and drivers
2.
“How”: Characteristics of land deals
FDI flows
FDI stock as % GDP
40
esp extractives, and policy
reform
45
40
30
35
25
30
20
25
20
15
% GDP
Driven by commodity demand,
50
35
$ billion
A fast evolving context:
Investment flows to sub-Saharan Africa
Major increase since 2000
15
10
10
Highly uneven distribution
5
0
factors likely to stay
1990
1980
2007
1990
2005
35
30
$Billion (nominal)
But, longer term, stuctural
0
1980
Likely to slow with economic
downturn
5
25
20
15
10
5
0
Uganda
Tanzania
Senegal
Nigeria
Namibia
Mozambique
Mali
Kenya
Ghana
Chad
Cameroon
Burkina Faso
Source: UNCTAD
Agricultural investment - drivers
Food vs fuel, Ethiopia
Biofuels – energy demand (transport),
government targets, oil prices (though
decline after summer 2008)
Agrifood - long term projections re: global
food demand; food price hikes 2008
Host country policy reforms to encourage
investment
Food produce
Biofuel
BITs by 12 African countries
200
Land acquisitions as policy and market
reaction
Why Africa? Investors: “inexpensive land”,
“favourable climates”, “labour available”
150
100
50
0
1960-69 1970-79 1980-89 1990-99 2000-on
by decade
cumulative
Agricultural investment - Key players
Some governments promote
acquisitions overseas - food
importing, official reserves (oil
revenues, trade surpluses)
E.g. Gulf states in Sudan
Ethiopia - classification submitted projects
by investor type
Wholly Domestic Co
8%
Foreign Stake Domestic Co
5%
Foreign private company
87%
Private investors (agribusiness,
finance) - expect significant
returns and/or land value
increases
E.g. Lonrho, Daewoo, Hadco
deals; private fund activity
in parts of Africa
Mali - classification of submitted projects
by investor type
Wholly Domestic Co
Foreign Stake Domestic Co
42%
17%
Domestic state-owned
company
Foreign company
8%
Foreign company, partly
foreign government owned
8%
8%
17%
Foreign company, majority
government owned
Ethiopia (2004-2008)
Number of projects
By year
Allocated land (ha)
Cumulative
Allocated land (ha) - by year
200
Allocated land (ha) - cumulative
500000
150
Hectares
400000
100
50
300000
200000
100000
0
0
2004
2005
2006
2007
2008
Investment commitments
By year
90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
2005
2006
2007
2008
2005
2006
2007
2008
Investor origin
Africa
Cumulative
100000000
2004
2004
Central Asia
China
Middle East
Europe
N. America
1.
“What”: Trends and drivers
2.
“How”: Characteristics of land deals
Acquirer
Provider
Government
Private
Government
Private
QIA deals in Sudan,
Indonesia, Vietnam
UAE deals in Sudan,
incl Abu Dhabi Fund
for Development
…
Daewoo-Madagascar;
Hadco-Sudan
…
Jarch Capital deal in Sudan
…
Type of land rights
Mainly govt leases (cf legal
constraints): qualitative (Lonrho,
Sudan) and quantitative (eg 100%
Ethiopia)
Land fees not main govt benefit
(Sudan); reported prices (Mali,
Ethiopia) 0-12 USD/ha/yr, possible 5yr exemptions
Investment and empoyment
commitments – but what legal
value?
Plantations seem predominant but
some contract farming esp in biofuels
Provisions on produce export – 100%
guaranteed?
100%
Lease <50yrs
Sale
Lease >50yrs
N/A
80%
60%
40%
20%
0%
Ethiopia
Mali
Land acquired from
100%
Government, but
with some use or
land claims
80%
60%
40%
Government,
with no other
land claims
20%
0%
Ethiopia
Mali
Local land rights
Land commonly state-owned,
protection of use rights varies
“Wasteland” – but what is it?
100% of land allocations in
Ethiopia (now triangulating);
Mali: farming, herding
No or little local involvement in
decisions (but Ethiopia, 3/6
projects: agreement with local
leaders)
Compensation tends to be
limited to improvements if
state-owned land,
compensation rates an issue
Final remarks
1960
2000
Major risks: loss of land access, esp
where growing scarcity; food insecurity,
economic marginalisation...
But also opportunities: harnessing
capital, know-how, market access...
Terms and conditions key – What
business models? What benefit sharing?
Who decides and how?
Properly negotiated investor-state deal,
but also triangle with local resource
users (decisions, benefits)
Secure land rights key to minimise
arbitrary dispossession and maximise
local benefit
Population density (UNEP, 2004)
[Lenders, insurers]
Host state agencies
Investor(s)
NGOs
NGOs
Local resource users