The New Scramble for Africa

GRAIN—Corporations and energy-hungry countries are pouring money into Africa for agrofuel crop production, fuelling a land rush reminiscent of Europe’s initial colonial expansion. Joining the foreign invasion are Africa’s governments and business elites. Pushed to the sidelines, some groups are speaking out about the devastation all this will cause to people’s livelihoods, but it is difficult to hear them over the clatter about Africa’s great opportunity to capitalise on the world’s energy and environmental crises.

When it comes to agrofuels, the road to Africa is paved with diplomats. A daily parade of foreign politicians stalks the continent negotiating agrofuel deals wherever possible. Europe, Japan and the US are, of course, very active, working their agrofuel interests into the various multilateral and bilateral aid, trade or investment agreements they have on the go with African countries. But the so-called emerging global powers are also busy on the continent: Brazil, largely by way of the state-owned oil company Petrobrás, has cut deals for ethanol imports and technology transfer with a range of African countries, from Senegal to Nigeria, Mozambique to Angola; [2] India has recently pledged US$250 million to a West African Biofuels Fund; and China has cemented a long-term cassava supply channel from Nigeria for its domestic ethanol distilleries. Add to this some trilateral agreements too, like the partnership that the UK and Brazil have formed with Mozambique.

What all of this handshaking among government people is really about is ensuring access to a steady supply of energy, both oil and agrofuels, which, of course, will be managed by the corporations. [3] And things are moving quickly in this direction. Corporations are already carving out areas for agrofuel feedstock production, and existing agro-industries and plantations are being expanded. [4] Early in 2007, for instance, the Tanzanian government disclosed that they were negotiating with 11 foreign companies for investment in agrofuels crop production in the country. [5]

Amid this flurry of foreign investment, there are losers as well as winners. Several local African entrepreneurs trying to jump on the bandwagon are struggling to make a go of it. [6] The Ghanaian company Biodiesel One recently had to shut down its 12,000-hectare jatropha operation and lay off its workers because it could not find the financial backing to continue. [7] The other local biodiesel company in Ghana, Anuanom Industrial Bio Products, faces similar financial problems, and its early efforts to tie up with foreign investors nearly destroyed the company. [8] So both companies are pushing the government hard to bail them out. In December 2006, the government pledged about US$2 million to support large-scale jatropha cultivation in the centre of the country, with over US$300,000 going directly to Anuanom. The government also announced plans to build a paved road into the area and appealed to local chiefs and landowners to make their lands available for the project. [9] Anuanom’s owner, Ghanaian industrialist Onua Amoah, has been acquiring lands for plantations in the area in partnership with 2008 presidential candidate Kwabena Frimpong-Boateng and other local elites. [10]

It has also been reported that the state-owned oil-trading company, BOST, has offered to purchase all the biodiesel produced in Ghana, giving the local companies a much-needed guaranteed market. [11] But the smell of potential profits is drawing foreign investors into the country. UK-based D1 Oils is setting up a fully owned subsidiary, and Israeli investors have been looking into the construction of a biodiesel factory in the central region. Canada-based, A1 Biofuels and its local partner, Sahel Biofuels Development Company, based in Niger, who are preparing sites for large-scale jatropha plantations across the Sahel region of West Africa, say they plan to construct a biodiesel refinery in Ghana too, with a capacity of 25 million litres per year.

Land for fuel, not for farmers

There are a number of NGO-led, small-scale biofuel projects in Africa, some of them going back quite some time, that typically produce both oil for local use and soap. Agrofuel advocates like to talk about these feel-good initiatives, but the current agrofuels boom has little to do with small-scale agriculture.

“Southern Africa has the potential to be the Middle East of biofuels”, said Andrew Owens, CEO of the UK’s Greenergy at an agrofuels meeting in Cape Town. [12] But to achieve this, he added, governments needed to standardise agrofuels policies across the region and work together to achieve economies of scale so that the industry would become competitive. [13] At the same meeting the managing director of SA Biodiesel rejected the “backyard production” of agrofuels and argued for tax breaks and large-scale production.

As a result, the money being invested in agrofuels in Africa is focused around large-scale plantation agriculture, tightly integrated into transnational corporate networks. [14] And, as in any other sector of agribusiness, corporate profit with agrofuel crops is best assured when these plantations are on the most fertile lands, close to major transportation routes. [15] Millions of small farmers still occupy these lands, however, and they have become the main obstacle in the path of the agrofuel rush. It is becoming clear that, whenever agrofuels are on the agenda, the pressure on farmers to leave their land intensifies.

In Tanzania, the prime minister is fast-tracking agrofuels to accommodate a Swedish investor looking for 400,000 hectares in the Wami Basin, one of the country’s major wetlands, to plant sugar cane for ethanol. The project will inevitably displace local small-scale rice farmers. [16] In Liberia, a UK company, Equatorial Biofuels, acquired Liberian Forest Products (LFP), which holds management agreements and permits covering over 700,000 hectares of land for the cultivation of oil palm. In Ethiopia, where land pressure is high, over 1 million hectares are being granted to agrofuel corporations to grow mainly jatropha, a potentially invasive species that is being introduced on a large scale without proper environmental impact assessments (see Ethiopia box) end of article)

A Southern African Development Community (SADC) agrofuel feasibility study warns against small-scale projects, claiming that they will affect standards. In addition, it also recommends that agrofuel legislation and seed regulations be standardised throughout the region, and calls for the provision of soft loans and measures to accelerate free trade in order to “open up new land”. [17] It seems that agribusiness and biotechnology companies are taking advantage of the agrofuels craze to push through a wide range of changes in the trade and farming regulatory set-up that will favour their interests.

It is often argued that, even if corporations come to dominate the agrofuels market, there will still be space for poor farmers to reap some benefits. It is claimed, in particular, that jatropha will grow in marginal conditions and thus be a suitable crop for poor families. But even this seems very unlikely (see article on jatropha) The truth is that the agrofuels boom in Africa is not about rural development and improving the living standards of poor farmers. On the contrary, it is about foreign companies taking over the land: by striking deals with government officials and lobbying for legal protection, subsidies and tax breaks; by acquiring scarce fertile land and water rights; by coercing farmers into becoming cheap labour on their own land; by introducing new crops in large-scale plantations; by introducing GM crops through this backdoor; by displacing people and biodiversity-based systems; and by enslaving Africa even more to the global market. Land grabbing on an unprecedented scale is on the march in Africa.

Agrofuels to improve energy security?

If the supposed benefits of agrofuels for Africa’s small farmers are already proving illusory, what about their contribution to the continent’s energy security? Is it not the case that agrofuel production will help the economies of African countries by reducing their reliance on costly fossil fuels?

The problem is that agrofuels are already being defined as a global commodity, to be traded on the world market, and such commodities are controlled by the local elites in alliance with multinational companies, and access to them is limited to those that can afford them. Oil is a case in point. It is now widely recognised that the large oil reserves found in some parts of Africa did not provide the countries involved with energy security nor bring benefits to the mass of their populations. [18] Take the case of Nigeria. It is a leading oil exporter, but biomass, mainly firewood, still meets the energy needs of up to 91 per cent of the country’s households. It is still a poor country, with 71 per cent of the population living on less than US$1 dollar a day, and the people in the Niger delta, the oil-producing region, are the poorest of all. [19] Nigeria is now planning a huge expansion of large cassava plantations for agrofuel production. But, just as in the case of oil, it is extremely unlikely that agrofuels will improve either the country’s energy security or the welfare of its people. The agrofuels boom is being driven by the government’s desire to increase export earnings, mainly through the export of cassava and sugar cane for agrofuels (see box on Nigeria). end of article)

It will almost certainly be a similar story with Africa’s non-oil-producing countries, which are now talking so enthusiastically about the potential of agrofuels to solve their energy needs. In these countries, oil imports are a crippling expense, consuming up to 50 per cent of export earnings. A rise in world oil prices has a huge impact on their growth rates. These countries are now assuming that by growing agrofuels they will have their own fuel and so lessen their exposure to fluctuating oil prices. But this will not be the case. The reality is that, just as in the case of oil and all other global commodities, the market will fix the price of agrofuels. The country of origin will have little control, especially if ownership of the whole value chain is in the hands of international companies. The production of agrofuels will not guarantee cheap fuel to the local population.

In principle, there is a great deal of scope in Africa for renewable energies, but the local governments are not drawing up adequate policies for the sector, and are doing little to attract investment into it. Biomass already accounts, on average, for 59 per cent of energy consumption (with a much higher percentage in most sub-Saharan countries), most of it from firewood, but also from cow dung and other locally available resources. [20] A lot of these activities are currently not sustainable, and pressure on biomass will increase with population growth, so national investment to improve these practices and provide alternatives would seem to be of the highest priority. However, the reality is that government expenditure on renewable energy in Africa has consistently declined. Ethiopia, for example, quadrupled its investment in oil exploration and tripled its investment in electricity in the 1990s, but expenditure on alternative energy decreased from about 1 per cent to 0.1 per cent of total investment. [21]

It is the same story for most of Africa, and the situation is likely to get worse. One venture to export biomass in the form of processed woodchips is already under way and, with the second generation of agrofuel crops, the region will start producing wood-based cellulosic biofuels. These initiatives will drive up the price of wood and charcoal, limit people’s access to the forests, and lead to the further depletion of Africa’s poor soils.

Africa is also the continent that will most seriously be hurt by another development caused by the agrofuel hype: increased food prices. Prices of several of the world’s staple foods are already on the rise as countries are diverting their land from food crops to fuel crops. The FAO estimates that the cereal import bill of low income, food-deficit countries – many of them in Africa – will increase by about one quarter this year as a direct result of the “ethanol effect”. [22]

Resistance is growing

People are starting to realise what the agrofuels boom is doing to their livelihoods, and resistance is growing. Farmers in northern Ghana have rejected jatropha as an agrofuel, mainly because they fear being tied down by fickle markets, and because of its toxicity, which limits its use. [23] In South Africa, civil society has rejected the government’s proposal to use tribal and communally owned land in the Eastern Cape for agrofuels. [24] Analysts are warning that maize for ethanol is not viable and that the shortage of arable land is a critical issue for South Africa. [25] In Uganda, civil unrest erupted after the government granted a permit to a company owned by East African Indians to exploit the Mabira forest to plant sugar cane for agrofuels, and the government has now backed down (see Uganda box). The African Biodiversity Network has severely criticised the UK for setting targets for biofuels that will sacrifice Africa’s land, forests and food to satisfy the UK’s vast energy requirements. [26]

To sum up, agrofuels will not improve the lot of the mass of African people for various reasons. First, the poor simply cannot afford them because they do not have money to buy energy, but rely on wood, charcoal and dung. Secondly, it makes no sense for rural families to replace their sustainable and food-secure agricultural systems and forests with foreign-owned industrial plantations and in the process become cheap and dispensable labour. Thirdly, the privatisation of the land that is the source of Africa’s wealth will undermine any chance that African countries have of determining their own future.

ENDS HERE.

To read the case studies on Uganda, South Africa, Nigeria and Ethiopia, please visit http://www.grain.org/seedling/?id=481#

References

1 A. Wade, “Africa Over a Barrel”, Washington Post, 28 October 2006. http://tinyurl.com/ssw8x

2 “Brazilian Company to build ethanol plant in Africa”, The Ethanol Producer, http://tinyurl.com/yuloyt

3 “Africa Forges Energy Partnership with Europe”, http://tinyurl.com/yrzpkf

4 See “Cameroon: Oil palm plantations fostered by new biofuel market harm local livelihoods”, World Rainforest Movement, http://tinyurl.com/259zhn

5 The companies include Felisa (in Kigoma region); Amma (in Tanga region); Diligent Tanzania Limited (in Arusha); Procon, Diadem (in Rukwa region) and CEPA (in Morogoro), http://tinyurl.com/ysba4k

6 For more information about biofuel projects in West Africa, see: Gbosségnon Christophe Gandonou, “Situation des biocarburants en Afrique de l’ouest”, http://www.grain.org/m/?id=131

7 http://tinyurl.com/2448ow

8 “Fraud office question Ghana Bio Diesel”, Alexander’s Gas & Oil Connections, 2 December 2004, http://tinyurl.com/ywjnwv

9 http://tinyurl.com/28t37p

10 “Wanted – an administrator for Ghana”, Hi Ghana, 7 June 2007, http://tinyurl.com/293cvh

11 “BOST agrees to buy local biodiesel”, Daily Graphic, http://tinyurl.com/2xbbe4

12 Biofuels Markets in Africa Conference proceedings, http://tinyurl.com/28h825

13 Ibid.

14 “Combustion or Consumption? Balancing food and biofuel production”, IRIN, 25 April 2007, http://tinyurl.com/2xewqx

15 L Strydom, “Biofuels 2006: How is the global value chain shaping up?” Eco world, 30 December 2006, http://tinyurl.com/2qyb3v

16 Abdallah Mkindi, Envirocare, Tanzania, personal communication.

17 Namibian Agronomic Board, “National Bio-oil Energy Roadmap”, August 2006.

18 Up to 50 million metric tons of refined product – or 78% of the annual consumption of the 48 sub-Saharan countries in Africa - is expected to be added to the world market by 2010. See: http://tinyurl.com/2w8vdk

19 http://tinyurl.com/2vrbw3

20 S. Karekezi et al., Renewables in Africa, AFREPREN, February 2007, http://www.afrepren.org

21 Ibid.

22 FAO, “Crop Prospects and Food Situation” No. 3, May 2007, http://tinyurl.com/2kswxw

23 http://tinyurl.com/2on3ou

24 “Rural communities express dismay: land grabs fuelled by biofuels strategy”, Report of Civil Society Workshop on SA Biofuels Strategy, Durban, 5 March 2007, p. 2, http://tinyurl.com/3cetb5

25 G. Morris, “Strong land use policy is key to developing South African biofuels”, Biofuel Review, 10 April 2007,
http://tinyurl.com/36futn

26 http://tinyurl.com/2kfjwz

<< Back to main