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Hedge Funds accused of ‘grabbing land’ in Africa 0

Foreign hedge funds are behind land grabs in Africa to boost their profits in the food and biofuel sectors, according to a US think-tank.

The Oakland Institute said it released its findings after studying land deals in Ethiopia, Tanzania, South Sudan, Sierra Leone, Mali and Mozambique.

Researchers at the California-based Institute think that Emergent’s clients in the US may have invested up to $500 million in some of the most fertile land in the expectation of making 25% returns.

According to The Guardian (UK), a spokesman for Emergent refuted the findings and defended the deals.

“Yes, university endowment funds and pension funds are long-term investors,” he said. “We are investing in African agriculture and setting up businesses and employing people. We are doing it in a responsible way … the amounts are large. They can be hundreds of millions of dollars. This is not land grabbing. We want to make the land more valuable…”

The “Understanding Land Investment Deals in Africa” report also reveal that these largely unregulated land purchases are resulting in virtually none of the promised benefits for native populations, but instead are forcing millions of small farmers off ancestral lands and small, local food farms in order to make room for export commodities, including biofuels and cut flowers.

“The same financial firms that drove us into a global recession by inflating the real estate bubble through risky financial maneuvers are now doing the same with the world’s food supply,” said Anuradha Mittal, executive director of the Oakland Institute. “In Africa this is resulting in the displacement of small farmers, environmental devastation, water loss and further political instability such as the food riots that preceded the Tunisian and Egyptian revolutions.”

The Institute also said: “Hedge funds and other foreign firms have acquired large swathes of African land, often without proper contracts…the contracts also gave investors a range of incentives, from unlimited water rights to tax waivers.”

“The research has exposed investors who said it is easy to make a deal – that they could usually get what they wanted in exchange for giving a poor tribal chief a bottle of Johnnie Walker [whisky],” says  Mittal. “When these investors promise progress and jobs to local chiefs it sounds great, but they don’t deliver. No one should believe that these investors are there to feed starving Africans.”

Meanwhile a cross number of experts and Civil Society Organisations(CSOs) have said that the report has brought out the truth about institutions behind the grabbing of land from poor people.

Obang Metho of Solidarity Movement for New Ethiopia, an NGO based in Ethiopia also says:  “These deals only lead to dollars in the pockets of corrupt leaders and foreign investors”

However, not all companies named in the report accept that their motives are as suggested and they dismiss claims that their presence in Africa is harmful. EmVest Asset Management working in Sierra Leone strongly denied that it was involved in exploitative or illegal practices.

“There are no shady deals. We acquire all land in terms of legal tender,” EmVest’s Africa director Anthony Poorter told the BBC. In Mozambique for example the company’s employees earn salaries 40% higher than the minimum wage. They are extremely happy with us.”

But Abdulai Conteh, a local traditional leader in Sierra Leone, told BBC Africa that: “Some people are doing business here but I have no idea what they are doing with our land. I see them growing sugarcane. That’s all I know.”

A recent research by the World Bank and others suggests that nearly 60 million hectares – an area the size of France – has been bought or leased by foreign companies in Africa in the past three years.

By Staff writer: Afronline   Sources: BBC Africa, Reuters The Guardian,    Read report here

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Direttore Responsabile Giuseppe Frangi