Although I try to avoid writing about finance, there is a fascinating piece in The Observer on investment banks, hedge funds, commodity traders, sovereign wealth funds and UK pension funds leading the rush to buy cheap agricultural land in Africa:
“Ethiopia is only one of 20 or more African countries where land is being bought or leased for intensive agriculture on an immense scale in what may be the greatest change of ownership since the colonial era.
An Observer investigation estimates that up to 50m hectares of land – an area more than double the size of the UK – has been acquired in the last few years or is in the process of being negotiated by governments and wealthy investors working with state subsidies.
In many areas the deals have led to evictions, civil unrest and complaints of “land grabbing”. “
I have been to Ethiopia and seen how poor the the rural population are, especially the children, and am unsure what to think about the story. If the investments are creating local jobs, allowing families to send their child to school and break a cycle of poverty are they a good thing ? Or am I being naive and ignoring the ultimate interest of investors, which is making money ?
After all, old-style colonialism didn’t exactly work out well for the region.
The potential consequences of the fight for access to diminishing land was shown this weekend in the massacre in Jos, Nigeria.
I am going to have to make up my mind as the issue is only going to become more important. As the Red Cross points out :
Sub-Saharan Africa is not on track to achieve a single Millennium Development Goal. It is the only region in the world where malnutrition, a product of food insecurity, is on the rise.