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  • African Land, Up For Grabs
  • Ashwin Parulkar (bio)

Sheikh Mohammed Hussein Ali Al Amoudi, a citizen of Saudi Arabia, spends his time shuttling between Riyadh and Ethiopia, where he was born in a village 64 years ago. The son of a Yemeni father and Ethiopian mother, Al Amoudi boasts an estimated net worth of $10 billion. He is the richest Ethiopian and, according to Forbes, the 64th richest man in the world. Forty-five years ago, he emigrated to Saudi Arabia and built his fortune in oil refineries and the booming construction industry.

But Al Amoudi never lost touch with his homeland. In fact, Ethiopian real-estate has become a key part of his burgeoning portfolio. In 2009, Al Amoudi's company, Saudi Star Agricultural Development, signed long-term leases for nearly 25,000 acres in the country's northeastern regional state, Gambella, to produce [End Page 103] rice for the Saudi market. Early in 2009, Horizon Plantations, another Al Amoudi venture, secured licenses through the Ethiopian Investment Agency to acquire a long-term lease on more than 600,000 acres of farmland in Gambella and in the Benishangul-Gumuz state in western Ethiopia—an investment some estimates put at $250 million. The Sheikh is now reportedly the largest foreign-based investor in Ethiopian land.

But Al Amoudi is not alone in seeing the vast Ethiopian plains as cheap, fertile property ripe for investment. During the past six years, as global food and oil price increases made it more expensive to import food, Saudi Arabia and other Gulf states began investing in earnest in Ethiopia and Sudan—in excess of $75 billion from 2005 to 2009, according to the Arab Organization for Agricultural Development. The largest land investor among the Gulf States, the United Arab Emirates, now controls over 1,100 square miles of farmland in Sudan.

India has also emerged as a major player in African agriculture. Last year, Ethiopia's Minister of Agriculture, Tefera Deribew, visited India to announce his government's intention to offer 4.4 million acres of farmland to Indian agro-enterprises. According to the government of India, the country's private sector has already invested more than $4 billion in farmland located in other countries. The first to do so in Ethiopia was Karuturi Global, an Indian-based agri-business known primarily for producing cut roses. In 2010, it acquired a lease for 740,000 acres in Gambella to farm wheat, maize, and rice. Groups of Punjabi farmers are currently negotiating a deal with the Ethiopian government to lease 250,000 acres at astonishingly low rates—$3.60 per acre per year, for 25 to 40 years, with the first five years rent-free.

These deals are part of a land grab taking place all across Africa, a transfer of control unprecedented in the postcolonial era. According to a World Bank report released in January, 48 percent of all land deals struck worldwide between October 2008 and August 2009 involved land in sub-Saharan African countries. The pace of acquisitions has been stunning. Last September, a World Bank report revealed that in 2009, some 111 million acres of farmland was acquired globally by foreign investors—nearly 75 percent of it in sub-Saharan Africa. Prior to 2008, foreign investors only acquired an average of 10 million acres per year.

Since the food price hikes in 2007, a range of investors—including wealthy food-importing nations like the oil-rich Gulf states—have been acquiring large tracts of land throughout Asia, Latin America and Africa. Seeking new ways to meet the food needs of their populations, a wide range of countries—including China, Kuwait, India and South Korea—have also invested heavily in land outside their borders, mostly in sub-Saharan Africa.

Generally, the deals do not involve outright sales. They are usually structured around multi-decade agreements that allow the government leasing the land to retain ownership while ceding practical control. These agreements are complex, and it's difficult to characterize them as strictly [End Page 104] private- or public-sector. In these arrangements, investment categories overlap, since governments sometimes play an instrumental role in adjusting regulatory frameworks to secure deals for the private...

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