As second or third generations take over the reins of family businesses, they may be more open to outside investment to grow their companies. East Africa in particular has a rich seam of such businesses, which canny private-equity investors should be exploring.
The World Bank is driving a failed strategy in the DRC
In the DRC, the Bukanga Lonzo Debacle shows that agro-industrial parks are a false solution to the challenges faced by the DRC and Africa when it comes to food, agriculture, and poverty alleviation.
“We have inherited these lands from our ancestors. This is where they are buried. These lands can’t be sold and we must preserve them for future generations,” emphasises Chief Nzasi Ndukupala of Baringa Ngasi in the Democratic Republic of Congo (DRC). The Chief is opposed to the takeover of 80,000 hectares of land for the Bukanga Lonzo agro-industrial park.
The park was set up in 2014, some 260km south-east of the capital, Kinshasa, through a public-private partnership between the government and a South African company, Africom Commodities. With $92m of public funding from the government, Bukanga Lonzo was supposed to produce corn and other crops on an industrial scale. It was a pilot project – the first in a plan to establish 22 agro-industrial parks across the country on over 1.5m hectares of land.
The Bukanga Lonzo Debacle, a report by the Oakland Institute, details how Chief Ndukupala, like the other community leaders in the area, was initially told that the government will set up an “agricultural village” (“village agricole”) that will support local farmers and bring development. He was then made to sign an “Act of Engagement”, a receipt for a consignment of goods received by his village, which included cola nuts, cigarettes, matches, blankets, loincloth, salt, soap, beer, one chainsaw, $7,000 in cash and a Haojin motorbike. In a sad reminiscence of colonial practices, for government officials these goods formed compensation for the land taken away from the people.
Instead of the promised “agriculture village”, the park turned out to be a mega-farm
After signing the documents, the local villagers lost access to their land and became subject to violence and repression by the police forces assigned to the park if accused of trespassing. Instead of the promised “agricultural village”, the park turned out to be a mega-farm, where production was to be highly mechanised, with some 300 machines, over 50 tractors, two planes for spraying chemicals, and limited job opportunities after the initial construction phase.
The park was hailed as a game-changer for DRC. “The time has come to transform Congolese agriculture from a subsistence sector to a powerful engine of global economic development,” stated President Joseph Kabila Kabange, while celebrating the first harvest of the park in March 2015.
However, after the 5,000 ha planted the first year, the surface cultivated dropped in the following years, until the project collapsed in 2017. The South African staff left the country, the local personnel was fired, and, in June 2018, Africom launched a court action against the country at the International Court of Arbitration in Paris for non-payment of their expenses. While activities remain on stand-by, the government announced in 2018 its plans to revive the park and pursue plans to establish 21 other projects.
A leaked Ernst & Young audit points to corruption and mismanagement by Congolese officials and the South African company, which might have been factors in the failure of the project. Whereas Congolese NGOs have called for proper investigation of potential corruption and embezzlement, incriminating corrupt officials should not overshadow the central role and the responsibility of two financial institutions in this debacle: The World Bank and the African Development Bank (AfDB).
The plan to establish agro-industrial parks in DRC is based on a development model that the World Bank has been promoting in Africa in recent years by encouraging growth poles, development corridors and special economic zones as instruments to attract foreign investment. In DRC, the World Bank is officially responsible for the agro-industrial parks strategy. It works closely with the AfDB to finance this strategy, select potential sites, and conduct feasibility studies for the parks, while blatantly ignoring many of the issues detailed in this report, including the stealing of land from local communities. Instead, together with the government, the two institutions advertise millions of hectares of land that would be available to potential investors in agro-industrial parks.
Both institutions are promoting a misleading narrative about African farmers being backward
Both institutions are at the forefront of promoting a misleading narrative about African farmers being backward and agriculture having to evolve to the Western-industrialised model. The Bukanga Lonzo Debacle details the fallacies of this storyline and shows that agro-industrial parks are a false solution to the challenges faced by the DRC and Africa when it comes to food, agriculture, and poverty alleviation. Whereas there is no doubt that investing in Congolese agriculture should be a priority, focusing on large-scale, industrial farming, to be conducted by foreign investors, does not address the need to improve productivity and income of the farmers.
As called for by Congolese farmer organisations, instead of taking land away from the people to develop industrial production in agro-industrial parks, much can be done to support farmers and address their needs – for instance access to good seeds and credit or help for the transport, processing, and commercialisation of their crops. In 2009, the government released its agricultural policy (“Note de politique agricole”), which provided a comprehensive vision for agricultural development of the country and on the relevant actions required to improve production and income for the rural Congolese. This policy has never been implemented, despite a 2011 agricultural law that was supposed to put it in action. Instead, emphasis was put on agro-industrial parks, which, as in the case of Bukanga Lonzo, do not contribute to the objectives of the policy and, instead, grab land from local communities.
It is time for the government of DRC, along with its supporters, the World Bank and the AfDB, to learn from the Bukanga Lonzo debacle and ditch their plans to develop additional parks in the country. What should instead happen is already listed in the agricultural policy and recommended by farmer organisations. The $92m public funding allocated to Bukanga Lonzo demonstrates that financial resources are available. What is needed is the political will of the government to start implementing a farmer-centred agricultural policy that will effectively allow the country to end hunger and poverty.
The report and accompanying documentation, including the Compilation of letters and petitions from local communities and their representatives, copies of the “Act of Engagement” signed by local chiefs, the leaked Ernst & Young audit, a speech by the CEO of Africoms, and the incorporation documents of the mining company created in the park are available here.