Land Grabs in Africa by US Corporations, Universities Leading to a New Colonialism

Across the African continent, land grabs by corporate conglomerates, American universities and European financial speculators have prompted worry among Africans concerned about a new form of colonialism taking shape.

Universities like Harvard and Vanderbilt are using British hedge funds and European financial speculators to buy or lease vast areas of African farmland in deals—and according to a new study by the California-based Oakland Institute, some of the speculation may force many thousands of people off their land.

In addition, a landmark G8 initiative that was hailed by President Obama two years ago as a boon to Africa because it would boost agriculture and relieve poverty has instead had the destructive effect of moving African governments to change seed, land and tax laws to favor private investors over small farmers.

In the 10 nations that made more than 200 policy commitments as a result of the G8 New Alliance for Food Security and Nutrition initiative—which pledged to accelerate agricultural production and lift 50 million people out of poverty by 2022—laws and regulations are being altered to give giant agribusinesses unprecedented access to decision-makers over the past two years. The countries are making it easier for companies to do business in Africa through the easing of export controls and tax laws, and through governments corraling huge chunks of land for investment.

As a result of the initiative, the Ethiopian government has said it will “refine” its land law to encourage long-term land leases and strengthen the enforcement of commercial farm contracts, while Malawi has promised to set aside 200,000 hectares of prime land for commercial investors by 2015. Ghana will make 10,000 hectares available for investment by the end of next year while Nigeria is moving to the privatization of power companies.

“The scramble for Africa is never good,” former Mozambican President Joaquim Chissano said on Al Jazeera America. “We have known that since Berlin and we fought against it. But investment is welcomed if it is done in a win-win situation when people benefit from this investment.”

This trend toward buying land in Africa has come from the 2008 spike in food prices, a concern about global food security as well as an impending energy crisis, said Oxfam trustee Nkoyo Toyo. However, she warned that investments might not be as good as they seem, and that U.N. records show alarmingly rapid sales of African land.

“The problem with this type of investment is not that we do not want to see investment. It’s that we see investments that are increasingly not addressing the needs of the continent,” she said. “We hear that at least 33 million square hectares of land are lands which have been acquired in just less than 10 years.”

As for the American universities, much of their money is being channelled through London-based Emergent asset management, which runs one of Africa’s largest land acquisition funds, run by former JP Morgan and Goldman Sachs currency dealers, according to The Guardian.

The report by Oakland Institute said Emergent’s clients in the U.S. may have invested up to $500 million in some of the most fertile land in the expectation of making 25 percent returns.

In response, Emergent said the deals were handled responsibly.

“Yes, university endowment funds and pension funds are long-term investors,” a spokesman said. “We are investing in African agriculture and setting up businesses and employing people. We are doing it in a responsible way … The amounts are large. They can be hundreds of millions of dollars. This is not landgrabbing. We want to make the land more valuable. Being big makes an impact, economies of scale can be more productive.”

Olivier de Schutter, the U.N. special rapporteur on the right to food, said governments had been making promises to investors “completely behind the screen,” with “no long-term view about the future of smallholder farmers” and without their participation.

“There’s a struggle for land, for investment, for seed systems, and first and foremost there’s a struggle for political influence,” de Schutter told The Guardian.

Zitto Kabwe, the chairman of the Tanzanian parliament’s public accounts committee, told the Guardian he was “completely against” the commitments his government has made to bolster private investment.

“By introducing this market, farmers will have to depend on imported seeds. This will definitely affect small farmers. It will also kill innovation at the local level. We have seen this with manufacturing,” he said.

“It will be like colonialism. Farmers will not be able to farm until they import, linking farmers to [the] vulnerability of international prices. Big companies will benefit. We should not allow that.”