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How Politicians Gave Away $100bn of Land

July 15, 2012
Novafrica Developments--The Africa Report n°42


With minimal consultation, governments and local authorities are signing away huge tracts of lands for lease on the cheap. Now communities are raising their voices in opposition to these projects that bring little local development.

The Nguruman Escarpment is one of the global tourism’s secret. Rising from the arid and salty wastes of Lake Magadi as the Rift Valley heads south out of Kenya is a steeply rising expense of yellow-fever acacia thickets and vast savannah meadows. At its northern edge, is overlooked the Serengeti plains from a height of 2,000m. It feels as if God installed a private balcony to gaze over creation.

Visits are by invitation. Bill Gates has been here; Kofi Annan stayed here while mediating the Kenya crisis in 2008; and Kenya’s Prime Minister Raila Odinga has used it as a retreat.

In the shadow of the Ngurumans lies a darker reality: the dispossession of a Maasai community to secure this paradise. The Olkiramatian Group Ranch, a community of about 8,000 people, faces eviction following a legal battle with Nguruman Ltd, the company that owns the escarpment property.

In 1996, during a severe drought, the community’s herders took their livestock up the escarpment. The northern edge of the escarpment has traditionally been used for dry season grazing. On that occasion, however they found their access paths blocked. A few days later, they received a court writ accusing them of trespass and charging them with destruction of grassland valued at almost $2m.

Recently, a court in Kericho ruled in favor of Nguruman Ltd and its sole director, Hermanus Phillipus Steyn. The ruling meant that if they were unable to pay the damages, some 3,000 families resident in Olkiramatian Group Ranch and the neighboring Shompole Group Ranch face eviction from their homes.

The land grab had started in 1986 when Steyn, a South African investor, along with 14 officials of Narok and Olkejuado county councils – the two local authorities under whose jurisdiction the Ngurumans fall – obtained the title deed to a small ranch known as Kamorora, on which the lodge sits. Kamorora had been illegally registered. However over the course of the next few years, Steyn quietly bought out his co-directors in Nguruman Ltd. As sole proprietor, he was able to dictate terms, preventing the surrounding communities from accessing the escarpment.

In Kenya, such stories are common. Presidents and their homeboys settle their people in new lands saving a chunk for themselves. They are then reluctant to implement land reforms that would secure individual and communal land rights or deal with historical dispossession. These were some of the underlying issues that led to the blood-letting following the botched 2007 presidential elections.

The tension between a deregulated land regime and claims to territory from marginalized ethnic groups such as the Maasai has defined much of Kenya’s politics. It is perhaps because of this raw domestic competition over land that it has escaped relatively unscathed from the bigger phenomenon sweeping Africa: the global land grab. Over the past decade Africa has experienced unprecedented pressure from foreign investors seeking cheap agricultural land. The figures are imprecise, collated by activist groups without verification from state authorities, but point to the scale of the problem. A review of data from several national reports, together with surveys by the African Union, the United Nations (UN) and the World Bank suggests Africa has effectively given away some $100bn of land since 2000.

The international market price of land is, of course, subject to huge dispute – not least because of the lack of reliable national valuation systems.

Market prices for land sold or leased in Africa vary spectacularly. For example, an acre [0.4ha] of land in Kitengela, just outside Nairobi, sells for a minimum of $10,000 an acre, yet there are reports of land in the Tana Delta, where Qatari companies are planning a rice project, being leased for as little as $3 an acre. In South Africa, tracts in the Wine lands can change hands for as much as R500,000 ($60,000) an acre but sell for as little as R700 in the Karoo. In Ghana, land prices have escalated sharply over the past two decades and plots in the Eastern Region, north of Accra, are sold on long leases for $40,000 an acre. Leases in Nigeria are generally more expensive still. Leases around urban centers such as Lagos and Abuja are among the most expensive in the world.

With growing activism and laws in Africa and beyond constraining the operations of mining and oil conglomerates, the trade in land and agricultural commodities is becoming the last frontier for buccaneer capitalism.

A recent report by the International Development Law Organization found that, globally, “in 2009 alone, transactions covering at least 56.6m ha were concluded or under negotiation, more than 13 times the average amount of land opened to cultivation annually between 1961 and 2007. Most of the 2009 deals were in Africa, where 39.7m ha changed hands –more than the cultivated areas of Belgium, Denmark France, Germany, the Netherlands and Switzerland combined.”

Wall Street goes farming. Demand for African farmland has boomed since the early 2000s. Global food prices have trebled because of harvest failures and the growth of biofuel production, which has displaced food crops. Reinforcing these pressures, says journalist Fred Pearce in his book The Land Grabbers, was the credit crunch of 2008. This prompted Wall Street investment banks like Goldman Sachs to shift risk from the sagging sub-prime markets into commodities exchanges. Between 2003 and 2008, notes Pearce, investment in commodity exchanges rose from $13bn to $300bn. At the same time, Middle Eastern countries such as Saudi Arabia and Qatar went looking for cheap farmland in Indonesia, Pakistan, the Philippines and Africa to grow food for their domestic markets.

They have been welcomed with open arms. “Africa needs investment, and this has been clearly stated by the leadership”, said Saudi agriculture minister Fahd bin Abdulrahman bin Sulaiman Balghunaim. “We open doors for the private sector to go and negotiate. It is up to the local governments to decide what they want to do, whether they want to lease the land, or they want to sell the land”.

Of all the agricultural land, says Pearce, none is as accessible as the Guinea Savannah Belt, “a great expanse of grasslands half the size of the United States, occupying an arc of 25 countries between the rainforest and the deserts – through West Africa to Sudan, then south through Kenya and Ethiopia to Zambia and Mozambique in the south. The World Bank calls this 1.5m square miles “the world’s last large reserves of under used land”.

None of this explains why, considering its tortured colonial history of land dispossession, Africa’s governments have so readily given up land for foreign investment. “I’ve argued that what is happening in Africa is a new scramble for the continent. But, in this present case, it is the state that’s grabbing the land and giving it to investors” says Ethiopian researcher Dessalegn Rahmato.

Foreign investors describe the deals in euphemistic terms. Speaking of agricultural development and reform, touting the benefits of technology transfer and increased employment, investors argue that these lands are scarcely populated.

But it is the posture of African states, as they open up their agricultural hinterlands, that is most disturbing. On a diet of neoliberal reform and growth based on foreign capital, governments in Mozambique, Zambia, Tanzania, Kenya Uganda, Ethiopia, the Democratic Republic of Congo (DRC), Mali, Liberia and others regard foreign direct investment in agriculture as a boon.

In most cases, the land deals are sealed in capital cities with little consultation with affected communities. As our research reveals, political elites use the new investments, usually in marginalized regions, to “civilize” their neglected populations and to benefit their own cronies.

During the World Economic Forum in Addis Ababa in May, Ethiopia’s premier, Meles Zenawi, announced that in addition to the millions of hectares his government had already made available, there was a further 4m ha on offer. Since 2001, the formerly Marxist government has turned away from a policy that favored the country’s teeming peasantry towards one that sees foreign capital as the route to middle-income status.

Between 1996 and 2008, according to the agriculture ministry, the government approved 8,000 applications totaling 3m ha of land for agricultural development. More than one-third of the lands were for smallholder farmers. Then the government started pursuing foreign investment. Initially, investors were directed towards the lucrative horticultural sector. Flower firms that had previously regarded Kenya as the primary East African investment destination redirected their investments to Ethiopia’s Rift Valley lakes.

Then, as global food prices rose in the mid-2000s, foreign investors began setting the agenda, growing crops such as rice, sugar, cotton and soya for export. This new investment agenda worked well for the federal government in Addis, which regarded the long-neglected regions in the west, south and east as ripe for exploitation. Lowland regions such as Gambela and Benishangul-Gumuz were urged to open themselves to foreign investors.

Coming up roses. The largest of these is Bangalore-based Karuturi Global, owned by Sai Ramakrishna Karuturi. The world’s largest owner of greenhouses, Karuturi Global produces 650m rose stems annually, some 10% of the global flower export market. After Karuturi’s investments in Ethiopian horticulture, the government granted it a 250,000ha concession for rice farming in Gambela. Now it wants a further 500,000ha.

Another major investor is Ethiopian- Saudi magnate Sheikh Mohammed Al Amoudi. He was, until 2009, Africa’s richest man, with a fortune estimated at $10bn. Al Amoudi has secured a 85,000ha rubber farm in Ethiopia. His 10,000ha rice paddy in Gambela, run by his flagship Star Enterprises, is advertised as “one of Ethiopia s premier investments”. Al Amoudi has asked for a further 100,000ha in Gambela to cultivate stock for biofuels. But as the new projects force local communities off their ancestral lands, destroy forests and eat into the game reserve in central Gambela, the Anuak and Nuer communities are rising in protest.

In Uganda, there is also a rising clamor over state-backed foreign investor-driven land gabs. A clear example of the new coalition of interests is emerging in the north-eastern region of Karamoja. Designated a closed district under colonialism, Karamoja and its pastoralist people are still assigned he role of “backward native” occupying a desolate place and caught up in a cattle-rustling culture.

Today, “development” means the deployment of the Ugandan army and Special Forces for “disarmament” exercises. That has been followed by the appointment of a “can-do” minister for Karamoja affairs. The minister Janet Museveni, is the wife of President Yoweri Museveni and mother of the commander of Special Forces, Colonel Muhoozi Kainerugaba.

Janet Museveni advised a jittery European Union official not to expect Uganda to “romanticize” what she termed “nomadism” but to recognize it as “a danger we have to fight like other social ills”. Pastoralists have been driven off as much as 60% of Karamoja’s fertile land.

Pointing fingers at the first family, Karamoja’s legislators recently named companies that have acquired more than 8,000ha in unclear circumstances. This did not include another 49-year lease of 1,000ha for just $50,000, paid not to the community, but to its local council.

In Mozambique, much of the new investment moved towards timber, for carbon credits, and agricultural land. According to the Oakland Institute’s seven- country study of land deals in Africa, Mozambique granted concessions to investors for more than 2.5m ha between 2004 and the end of 2009. This is 3% of the land area and 7% of the country’s arable land. More than a million hectares went to foreign investors, 73% for timber and 13% for biofuels and sugar.

“What appeared to be a new European “land grab” and the pressure for high profits has pushed foreign companies into seizing land farmed or used by local communities, displacing farmers and threatening their livelihoods and food security”, says the Oakland Institute report. As the investors needed local partners, Maputo’s political elite have benefited hugely, according to a local analyst.

In January, in the Cateme region of Tete Province, more than 700 families resettled by the Brazilian company Vale rebelled against the violation of their rights and poor living conditions after resettlement. Police beat back the protestors, a sign that the regime was not prepared to hear the community’s complaints.

Value not added. Part of the problem, says Namanga Ngongi, director of the Alliance for a Green Revolution in Africa (AGRA), is that African land has been the last factor of production to be marketed. After years of Bretton Woods structural adjustment programs, agriculture was liberalized when it required more state intervention and management. “Land was never factored into calculations around value”, Ngongi explains. “If we were able to show our rural populations that their lands were valuable, then maybe they can start factoring them into negotiations around the sale of those lands.”

There is no piece of land in Africa that is not claimed, says Joan Kagwanja, of the UN Economic Commission for Africa’s Land Policy Initiative. Although governments favor large-scale agricultural investments, the data shows Africa’s small-holder farmers to be far more productive.

Reversing land deals would require a Herculean effort. At the Land Policy Initiative, a research team has embarked on a thorough review of the land deals. It aims to set standards and guidelines for future land leasing.

In touting the benefits of large-scale plantation farming, Africa’s leaders are forgetting some very recent lessons. It is actually the continent’s 60 million small-holder farmers who are the backbone of agricultural development. Because their lands, from which so many are now being moved, have never been valued, they are being leased out to foreign investors for little more than nothing,

“If we were able to show rural communities that they are sitting on assets that could change their economic status you may have a lot more interest on their part in participating in discussions that would be profitable to them, to the country at large and to the international community,”’ says Dr Ngongi.

Parselelo Kantai in Addis Ababa, Fred Katere in Mozambique and Kalundi Serumaga in Uganda