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Foreign Investment in Tanzania: Introduction


Scrutiny of African land deals has been rekindled by a recent series of fiery reports. Throughout last year the Oakland Institute, a self-proclaimed policy think tank, began to issue briefs regarding a proposed project which would cede large tracts of land in Tanzania to an American-based corporation.

Reportedly, in 20081 Agrisol Energy, the American centerpiece of an international conglomerate based in Iowa, conducted an early feasibility study in Tanzania with an eye towards developing industrial-scale farmland. Foreign enterprise in Africa is nothing new, although historically the focus has been on mineral and hydrocarbon exploitation. Agencies from the United Nations and the World Bank have been pushing for African nations to court investment from abroad. In recent years companies from Europe, Asia and the Middle East have vigorously pursued arable land.

My interest in African land deals was kindled in 2008 when Daewoo Logistics, a South Korean shipping firm, negotiated a 99-year lease with the government of Madagascar. In play was 1.3m hectares (context given at the time compared this to half the size of Belgium), a huge amount of fertile land in a struggling country. Daewoo Logistics hoped to cultivate food and commodity crops for repatriation to South Korean and promised investment in infrastructure, as well as jobs for locals, in exchange for an unprecedented de facto purchase at pennies, if anything, per acre. I was skeptical that anyone would benefit beyond the company and a handful of Malagasy officials. The people of Madagascar appeared to agree, with opposition to the lease deal fueling a 2009 coup which toppled the regime.

What sparked immediate scrutiny of Agrisol Energy’s agreement with the government of Tanzania was the revelation that parcels of land in play would have to be cleared of refugees. Three separate areas, populated for over a quarter century by people who had fled ethnic clashes in Burundi, had been selected for lease.

Revulsion has been swift and widespread. Iowa State University, who had lent their academic prowess to Agrisol Energy during feasibility research, severed ties. Agrisol Energy has made alterations, or the content was poorly referenced by the Oakland Institute, to their completely non-informative website. Dan Rather Reports tackled the subject in September of last year.

Concern for Burundian refugees is not only understandable but undeniable. However, their plight is but one angle in an issue too obtuse to be easily squared away. Environmentalists are wary of Agrisol Energy’s partnership with Monsanto, the company’s enthusiasm for introducing bioengineered agriculture, and the effects of industrial farming on the land and water. Activists are troubled by the perceived trampling over the rights of the Tanzanian people, and in particular the open access to land and water rural and pastoralist communities. The potential for corruption and exploitation should be painfully clear to everyone.

Foreign acquisition of land, let alone all first world investment in the third world, is a vast subject. Lest my fingernails grow seven feet long while I dig through every nuance I am going to focus on Tanzania. Sierra Leone recently hosted a conference on the matter broadcast by the BBC which devolved into a shouting match encompassing a myriad of topics and leading to very little enlightenment. The PBS News Hour has similarly aired a piece about rural resettlement in Ethiopia, but as the government of that country seems hellbent on ragging their people into the next great humanitarian crisis through its insane actions it would be madness to try and extract one issue from the next.

Tanzania, despite what difficulties it faces, has proven to be a stable country for quite some time. There is malnourishment but no famine, they adhere to a derivative of English Common Law and scores of dopey white people take each others pictures next to wildlife without being held for ransom.

I’m also going to side-step my prejudice or any debate over the introduction of GMO crops. Potential land degradation and water fouling will be examined as they relate directly to foreign investment and practices.

What I will look into is the impact of foreign companies acquiring large parcels of land for development on the people near these projects.

Please continue to the second installment.

Image from the cover of the Oakland Institute report Understanding Land Investment Deals in Africa, Country Report: Tanzania. © Oakland Institute. I call if fair use.

1 Year taken from the Oakland Institute document Land Deal Brief: Eight Myths and Facts About Agrisol Energy in Tanzania (December 2011, pg. 2). A pdf is available on the Oakland Institute website. (Back)

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