Through a subsidiary of the conglomerate Daewoo, South Korea concluded in 2008 with Madagascar an agreement to lease 1.3 million hectares for 99 years. Land leases in Africa are not only prevalent; they are dirt cheap. Land rights are very low in northern Sudan, for instance, where a hectare can be leased from 2 to 3 dollars per year. In Ethiopia, a hectare is estimated at between 3 and 10 dollars. The contracts are almost all ‘short and simple compared to the economic reality of the transaction.’ 

The commitments in terms of job creation and infrastructure, though essential, are vague. The question of the distribution of crops between exports and local consumption is not really mentioned. Above all, people are kept out of negotiations and the data on the size or nature of the contracts are not made public. 

“The phenomenon exists and it is massive. We must ensure that its effects are positive and have minimal damage,” said Paul Mathieu, property expert at the United Nations Food and Agriculture Organization (FAO).

Investors in the continent are encouraged to communicate their true intentions right from the start of transactions. Host countries are, in turn, recommended to clarify their policy on domestic investments, benefit sharing, and considerations for quality transactions. There is also a call for the publication of any business decision, as well as the general and unconditional respect for the rights of landowners and tenants. 

The phenomenon of land hoarding by foreign investors in Africa is expected to grow, leading to economic and social transformations in Africa and elsewhere. It will also reverberate into major implications for the future of world agriculture.

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Via IFAD