The Land Rush in West Africa – Investors and investment models

Ward ANSEEUW

West Africa

Source: Land Matrix, base 2011

Host countries

# projects

ha

Source: Land Matrix, base 2011

Concentration of investments

Source: Land Matrix, base 2011

The investment dynamics – new actors, new investment models

Investors - Africa

0

10

20

30

40

50

60

70

80

90

China

Saudia

arab

ia UKInd

ia

south

Afri

ca USA

Nether

lands Ita

lyEgy

pt

Franc

e

Canad

aUAE

German

y

Portug

al

Sweden

Brazil

Israe

lLib

ya

Djibou

ti

Nigeria

Norway

Qatar

Austra

lia

Belgium

Malaisia

Singap

our

Japa

n

Num

ber o

f ann

ounc

ed d

eals Announced/Reported deals

Investors in Africa

0

5

10

15

20

25

30

# projects verified

Investors in West Africa

Investors

• Traditional Western food-producing, processing, and exporting companies seeking to increase market share

• Capital-rich / food insecure Land and water scarce populous but capital-rich (Asian countries, Gulf States - China: 20% of world pop / 9% of world arable land)

• New actors – Outside of agriculture (financial sector, …)

• Direct gov. involvement• Sovereign wealth Funds• State-owned enterprisesAvoiding markets

• Hedge funds,• Pension funds• Invest banks• Asset management compDiversifying portfolio/ speculation

• Private investors

7 land investment models in Africa

Independent farmer model

Associative farmer model

Cooperative farmer model

Speculative 1000-day model

Asset management and Investment funds model

Nucleus estate model

Agribusiness Estate model

High failures

Increased integration

Few inclusive models

Adaptation strategies

Non-land investment models and “Production” grabbing

Commercial banks engagement in primary agricultural production

Agricultural engineering/asset

management companies Investment/equity funds

• High cost of productive, competitive agricultural production (Increase of debt - Input prices increase - the land is not enough as collateral) - no collateral

• Internalisation - The production is never owned by farmer• Price risk - managed through hedging on futures markets (SAFEX)• Production risk (flood, drought…) is covered by the multi-peril insurance &

geographical/commodity diversity• Lowering transactions costs• Speculation

A complex and inter-dependent environment …

Drivers

LT Demographic

Change in diet and energy use

MTFood production

BiofuelsIndustrial production

Forest/fibre productionEcosystemic

Services/TourismSpeculation

Triggers

Food price crisis

Facilitators

-Land governance-Democratic governance -Economic

governance and market regulations

-Crisis of family farming (the

perception thereof)

A GOVERNANCE PROBLEM

(not an investor one only)

DOMESTIC land acquisitions

Large-scale land acquisitions as aggravator

DriversFood production

BiofuelsIndustrial production

Forest/fibre productionEcosystemic

Services/TourismSpeculation

Triggers

Food price crisis

Facilitators-Crisis of the

perception of family farming

-Land governance-Economic

governance and market regulations

-Democratic governance

LSLA asaggravators

Thank you!

Dr Ward ANSEEUWCIRAD Researcher

Post Graduate School of Agriculture and Rural DevelopmentUniversity of Pretoria

Pretoria 0002South Africa

Tel:   +27 (0)12 420 5022Fax:  +27 (0)12 420 3206

 Websites:

www.cirad.frwww.up.ac.za

www.landportal.info/landmatrixwww.commercialpressuresonland.org