Land investments or land grab?: a critical view from Tanzania and Mozambique

This report discusses the potential benefits of, and the current challenges for, agricultural land investment in Tanzania and Mozambique. The paper finds that there is little, if any, development potential in these investments. Indeed, the economic growth potential of investments in agricultural land is questionable due to an inadequate regulatory framework governing foreign direct investments (FDI) in the sector.

The document shows that FDI in agricultural sector in Tanzania and Mozambique can even jeopardise local resource users land rights. In this respect, the report highlights that farmers are giving away their most valuable assets to profit-seeking entities, based on information asymmetries and persuasion. The paper argues that this is not development, but it is land grabbing. In addition, the authors doubt whether the FDI projects analysed in the paper will spur significant developmental effects at the local level.

The report introduces the following policy recommendations:

• investments must never happen at the expense of people’s food security, and environmental impact assessment and a socio-economic impact assessment must be made prior to any investment
• there must be full transparency and disclosure in FDI in land, so that the local resource users and other civil society actors are given the possibility to influence the process
• information asymmetries are to be avoided to ensure real participation in the acquisition process
• regulations on judicial and ethical standards should be internationalised, and an international governing body is needed in this relevance
• regional cooperation is the only way to avoid the “race-to-the-bottom” between developing countries
• increase the policy space in the WTO to regulate FDI in developing countries.