By Marie Toulemond
Over the last 20 years, upwards of 35m hectares of land in Africa have been sold to foreign investors. Who are the buyers, where are they investing their money and what do they produce on the land they acquire?
According to the Land Matrix public database, Africa is targeted by large-scale land acquisitions (LSLAs) more than any other world region. Since 2000, many Chinese, Emirati, Lebanese, American and European investors have acquired several tens of millions of hectares of arable land in Africa – covering a surface area slightly larger than Côte d’Ivoire – through concession agreements.
Such investments, which peaked shortly after the 2008 food price crisis, tend to be perceived by host countries as a way to spur the attainment of food self-sufficiency, develop and industrialise their agriculture and reduce poverty.
In theory, land deals create domestic jobs and represent a significant source of tax revenues, although it is difficult to accurately estimate just how much because concession agreements are not made public. Employment creation is mentioned in 15% of the contracts signed on the African continent, according to Land Matrix.
A wide range of impacts
Ten years after the land rush, these investments have had a wide range of impacts. A number of the projects have become profitable and benefited local communities by providing access to pasture land, training, knowledge transfer and decent permanent employment opportunities.
That said, loose property laws and policy-making in other countries have paved the way for large-scale acquisitions, which in some cases have forced local farmers off their land, triggering more than 50 conflicts, according to data from Land Matrix.
Concession agreements, signed for an average term of 30 years, can also adversely impact the environment, such as by causing long-term soil erosion due to intensive farming or massive deforestation, a particularly widespread problem in the Congo Basin.
No less than 800 contracts have been signed in Africa since 2000, around 100 of which have been abandoned, to farm crops including flowers, sorghum, soy and agrofuels. In addition, 91 deals are under negotiation. Some 92% of land transactions were completed by private companies and over 50% of projects are either partly or entirely export-oriented.
Out of the 100 or so projects that have been abandoned, more than half are related to biofuels, specifically those derived from jatropha, a small shrub that grows in dry, poor soil and whose seeds are easily processed into diesel. In the 2010s, jatropha was touted as a green fuel of the future, giving rise to megaprojects, especially in Ethiopia and Madagascar.
Yields from jatropha plantations failed to live up to expectations, however, and many projects went bust.
African forests now in the hands of Asian conglomerates
Forestry attracts the most investment in Africa, which is home to 15.7m hectares of forests, half of which are located in the Democratic Republic of Congo (DRC). The sector is still largely structured by concessions that have changed hands from long-standing European operators to Asian conglomerates, with Chinese companies at the head of the pack. A majority of Africa’s wood production is now exported to Asia.
The arrival of Asian companies has stoked fears of intensified deforestation in Central Africa, with concerns that such firms could reproduce the same scenario that has already played out in South-East Asia, where forests have been depleted in defiance of the law, while degraded areas have been turned into palm oil or fast-growing tree plantations.
Ever since demand for land skyrocketed in 2008, many countries decided to overhaul their legislation so as to better protect land and local communities, with Ethiopia taking a step in this direction in 2013 and Ghana in 2019. Gabon, which has a massive logging industry, announced in 2018 that, as of 2022, all forest concessions must be certified by the Forest Stewardship Council (FSC). This measure should drastically reduce the country’s rate of deforestation.
Other sustainable forest management initiatives are also in the pipeline, including a partnership between the African Development Bank (AfDB) and the Climate Investment Funds (CIF).
The partners have developed an alternative and sustainable model for commercial forest management that reconciles economic growth with environmental conservation.
In 2016, for instance, the AfDB granted Ghana a $24m loan for a public-private partnership project to restore the country’s degraded forest reserves.
This article first ran in The Africa Report.