With the African continent being advertised across the globe as the next great investment opportunity for Western big business, the downside of such business interest is now apparent: Investors and corporations are engaged in large-scale land grabs all over Africa, leasing or buying huge tracts of land—with government consent—and consequently driving tens of thousands of people off their fertile ancestral lands.
The problem is so bad that a nonprofit that has been monitoring the issue felt the need to send out a warning on the eve of a global farmland investment conference that occurred in London earlier this month, calling on major farmland investors such as banks and pension funds to stop facilitating land grabs. The conference brought together investment funds that represented moe than $3 trillion in assets to explore the investment opportunities in Africa, Latin America and Russia.
“Unfortunately private investment in farmland may be seen by many as low risk and positive for developing countries. Yet they are often a disaster for local communities and the environment,” Kirtana Chandrasekaran, Friends of the Earth International Food Sovereignty program coordinator, told allafrica.com. “Legal uncertainty and community opposition means that most farmland investments are also risky for investors.”
“Major investors such as banks and pension funds need to urgently investigate their investment portfolios and stop funding land grabs,” she added.
Friends of the Earth Europe released a report, called “Farming money: How European banks and private finance profit from food speculation and land grabs,” that analyzed the activities of 29 European banks, pension funds and insurance companies, including Deutsche Bank, Barclays, RBS, Allianz, BNP Paribas, AXA, HSBC, Generali, Unicredit and Credit Agricole. The report showed that these institutions are intimately involved in food speculation, and the direct or indirect financing of land grabbing. The land grabs are especially acute in countries like Tanzania, Ethiopia, Liberia and Uganda.
According to the report, since 2008 rising financial investments in land have contributed to more than 200 million hectares of land being taken from small farmers, fisherfolk, and other rural communities, robbing them of their means of survival. Land grabbing also frequently involves violent evictions and human rights violations. Institutional investors are expected to increase their agricultural investment portfolios by the year 2017 by an estimated 500 percent.
These institutions are significantly influenced by the attention brought to African investment by such powerful voices as President Obama and Secretary of State Hillary Clinton.
Acknowledging Africa’s growth opportunities, President Obama—whose father was a native of Kenya—sent his acting Commerce Secretary Rebecca Blank to Africa to announce his administration’s new “Doing Business in Africa” campaign, which will feature two-way trade missions and shows, training American development leaders on working in Africa and holding a series of Africa Global Business Summits in the U.S. during 2013.
Many observers have interpreted Blank’s Africa trip—the first to sub-Saharan Africa made by a U.S. Commerce Secretary in a decade—of the Obama administration’s commitment to greater engagement in Africa during his second term.
At an event in Johannesburg to launch the campaign, Blank said President Obama believes Africa can be “the world’s next major economic success story.”
But the land grab crisis reveals the conundrum of Western style capitalism: When big business comes calling, someone is going to suffer—the collateral damage of capitalism.
