(Addis Ababa) Government policies and almost US$6 billion in aid money to support large partnerships with the private sector are risking Africans’ land rights, worsening inequality and damaging the environment. According to Oxfam’s latest report, ‘Moral Hazard? Mega public-private partnerships in African agriculture, so-called ‘mega’ public-private partnerships are unproven, risky and represent a dubious use of public funds to fight poverty and food insecurity.
Nearly half of Africa’s population depends on agriculture for their livelihood. Despite the proven impact of investments in agriculture on poverty reduction, spending from both African and donor governments has been low over the past two decades. Sub-Saharan African governments spend an average of only 5 per cent of their national budgets on the agriculture sector, despite their recently renewed Malabo commitment allocating over 10 per cent of their national budgets to the sector.
With growing global demand for natural resources, donors and African governments are looking to capitalize on increasing interest from the private sector in African land. Mega-public-private partnerships (PPP) 'growth corridor’ projects in Tanzania, Burkina Faso, Malawi, Ghana and Mozambique illustrate this trend. The New Alliance for Food Security and Nutrition, supported by the rich, industrialized economies of the G8; and GROW Africa, a large-scale PPP initiative supported by the World Economic Forum, are two examples of donor-led global initiatives to support the mega-PPP agenda.
“After decades of underinvestment, governments in Africa are turning to partnerships with donor aid agencies and large companies or investors to develop the agriculture sector. This offers the allure of capital, technology and foreign exchange, but the downside risks of this approach are huge – particularly for the land rights of local communities in the investment areas,” says Robin Willoughby, Oxfam’s Policy Adviser on Agriculture and Food Security.
Risking land rights
According to Oxfam, long-term development goals have been sacrificed in order to quickly establish mega public-private partnerships, as companies are offered land, tax and trade incentives to enter these schemes. Within just five countries hosting mega-PPPs, the combined amount of land in a target area for investment is larger than France or Ukraine.
Governments have earmarked over 1.25 million hectares for transfer to investors and large agricultural companies, the entire amount of land in agricultural production in Zambia or Senegal. Due to weak land tenure found in many African countries, these land subsidies and transfers are likely to undermine local communities’ land rights.
This model also threatens to worsen inequality in African countries, which is already severe across the continent, and damage the environment through the introduction of plantation agriculture, according to Oxfam.
Rather than prioritizing partnerships between governments and donors with large private sector players, Oxfam is calling for the tried and tested investment to deliver benefits for almost 600 million Africans working in agriculture. This involves public sector investment in smallholder farmers, local markets and regional markets, and strong regulation to ensure that private sector investment can ‘do no harm’ and benefit millions of smallholder producers living in rural areas.
Notes to editors
Oxfam’s report “Moral Hazard” is based on an extensive literature review, key informant interviews and three case studies in Burkina Faso, Malawi and Tanzania.
Full and Summary reports: www.oxfam.org/en/grow/research/moral-hazard
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