31 January 2011

Report shows how secret land deals can fail to benefit African nations – and how to make them better

African nations risk giving investors access to large areas of land in rushed, secretive and one-sided deals that fail to deliver real benefits or create new social and environmental problems, according to the first ever legal analysis of contracts which is published today (31 January) by the International Institute for Environment and Development.
The report analyses 12 recent contracts through which investors have leased large areas of land in East, West, Central and Southern Africa for various agricultural activities. It found many problems with the contracts but also some signs of positive deals.
A number of the contracts reviewed appear to be heavily biased in favour of the investors, granting them long-term access to land at very low costs while, in return, requiring little from investors in the form of benefits for local people and safeguards to protect the environment.
"Contracts define the terms of an investment project, and the way risks, costs and benefits are distributed but most contracts for large-scale land deals in Africa are negotiated in secret," says report author Lorenzo Cotula. "Only rarely do local landholders have a say in those negotiations and few contracts are publicly available after they have been signed."
Over the past few years, agribusiness, investment funds and government agencies have been acquiring long-term rights over large areas of land in Africa, raising both the promise of development opportunities and fears of a new “land grab”.
Some of the contracts analysed by the report are just a few pages long, with scant details on what investors should do to ensure that risks will be properly managed and that expected benefits will materialise.
The long-term nature of the leases – commonly up to 100 years – mean that local communities will be separated from the land for generations. This threatens to eradicate longstanding livelihood strategies and agricultural knowledge. Also, some contracts grant investors priority rights over water, which can have adverse impacts on other water users in times of water shortage.
The land fees can be very low. One contract from Sudan leases land for less than a dollar per hectare per year. Others make no mention of land fees at all, or explicitly allocate land for free – as in one contract investors signed with Mali.
Expected benefits are often in the form of jobs or irrigation and infrastructure development, rather than rental fees. But some contracts appear to lack enforceable commitments, or fail to provide detail about how many and what kind of jobs the investment will create. And some contracts appear to say little about the social and environmental standards needed to protect local people and the environment, or about the mechanisms to protect local food security.
But the report also finds that there are exceptions. For example, some contracts negotiated by Liberia stand out for their shorter duration, their more specific investor commitments on jobs, training, local processing and local procurement, their greater attention to local food security, and their tighter social and environmental safeguards. In addition, the Liberian contracts are ratified by parliament and are available online.
According to the report, determined political leadership, a strong government negotiating team and world-class legal assistance enabled the Liberian government to get better contracts.
The report also argues that, irrespective of contract terms, process is also critical. In many of the contracts reviewed, local people appear to have been marginalised in decision-making – it is the government that usually calls the shots. This is because land is often owned by the state. But local people – farmers, herders, hunter-gatherers – may have used that land for generations and see it as theirs. The problem is that their customary rights may have no or little recognition under national law.
"Even in the better negotiated contracts, the gap between legality – whereby the government owns the land and can allocate it to investors – and legitimacy – whereby local people feel the land is theirs – exposes local groups to the risk of dispossession and investors to the risk of contestation," says Cotula.
Cotula adds: "Land deal negotiations are unfolding fast and behind closed doors. But secrecy and haste are no friends of good deals. Rather than rushing into land contracts, governments should promote transparent, vigorous public debate about the future of agriculture in their country – and producer organisations must be central to that debate."
To arrange an interview, please email: mike.shanahan@iied.org

World Bank sharpens African focus

The World Bank is to strengthen its focus on funding development programmes in Africa, with plans to introduce a new five-year support strategy already at an advanced stage.
Africa_satellite_orthographicThe new strategy, known as "Africa's future and World Bank support to it", replaces the outgoing Africa Action Plan, which was introduced in 2005.
The 2011 to 2016 strategy will be officially announced to the public in March, but will be implemented from the beginning of the new fiscal year in July. It is currently being finalised within the World Bank.
The new plan will focus on fostering development on the continent through partnerships with various sectors. When released, it will outline how the organisation "plans to revise its approach and deepen its partnership with Africa", according to the World Bank.
"The main instrument for implementing the strategy will be partnerships," Obiageli Ezekwesili, World Bank vice president for the Africa region, said in a news release.
"We need to leverage the private sector, development actors and most importantly the African society in designing development solutions going forward. We must ensure that our knowledge and financial resources are much more productive and effective."
The Africa Action Plan was a working document credited for keeping the World Bank focused on necessary development initiatives in Africa.
The Africa Catalytic Growth Fund (ACGF), through which the World Bank disbursed grants to the poorest African countries as opposed to offering loans, is one of the initiatives that came out of the Africa Action Plan. ACGF was launched in 2008 and is likely to be incorporated into the new strategy.
Some of the specific commitments of Africa Action Plan included increasing financial support for free primary education in 15 countries. The strategies are part of efforts to make it possible for countries to achieve some of the 2015 Millennium Development Goals.
Vital input
The new strategy will be largely influenced by input from thousands of people, mostly Africans. The World Bank said it consulted no less than 2 000 Africans and other role-players over eight months to discuss the revision of the current strategy.
The consulted included government officials, development experts, policy-makers and legislators, Africans in diaspora, civil society representatives, the private sector, the media and academia, said the bank.
Consultations were held in 36 countries, including 31 African states, through face-to-face meetings and workshops.
Issues raised included how governments could beef up their capacity to manage resources, how sub-regional economic blocs could step up their roles and how the private sector could be involved in driving economic growth.
A popular suggestion was strengthening the focus on African agriculture.
The best ways to incorporate informal sector s into mainstream economies will also likely be prioritised in the new strategy, as was suggested in the consultations.
Draft strategy well received
The bank said a number of those consulted reviewed the strategy draft in November 2010 and expressed that it could make a huge contribution to development on the continent.
"The comments we received proved what we have known for some time: that Africans are best placed to determine their development needs and the interventions necessary to foster economic growth and poverty reduction in their countries," said Shanta Devarajan, World Bank chief economist for the Africa region.
Devarajan is also one of the lead authors of the strategy.
In 2010 the World Bank channelled US$11.5-billion (R81.4-billion) into loans, near-zero-interest credits, grants, equity investments and guarantees to Africa.
Source: www.MediaClubSouthAfrica.com

Altira Group further expands its Africa Investments business area ++ Mutual fund for African equities added to product range ++ Portfolio manager Jens Schleuniger joins the Altira Group

DGAP-News: Altira AG / Key word(s): Miscellaneous
Altira Group further expands its Africa Investments business area ++
Mutual fund for African equities added to product range ++ Portfolio
manager Jens Schleuniger joins the Altira Group.

The Altira Group is further expanding its Africa Investments business area.
To this end, the company has hired Jens Schleuniger, formerly responsible
at DWS for managing the EUR 340 million DWS Invest Africa equity fund,
which he launched in 2008. Together with Jens Schleuniger, the Altira Group
will be adding investments in African equity markets to its range of
services and offering the mutual fund VCH Africa.

In 2007, the Altira Group founded the African Development Corporation
(ADC), which specialized in private equity investments in the financial
sector in sub-Saharan Africa. The expansion of its product range to include
African equity funds therefore creates a potential for significant
synergies. The same applies to work done with the Group´s commodity xperts,
who manage more than EUR 110 million in capital in the commodity
and commodity equity sectors, since the resource-rich continent of Africa
is playing an increasingly important role as a field of activity for mining

The DWS Invest Africa fund that the 30-year old Swiss national Jens
Schleuniger launched and managed, until recently, was one of the first
mutual funds investing exclusively in Africa. He also managed the DWS GO
Frontier Markets fund and was co-manager for DWS Türkei. Before moving to
DWS, Jens Schleuniger was responsible for strategic business development in
Switzerland with JP Morgan Asset Management. Prior to that, Mr. Schleuniger
held various positions with UBS in Switzerland and London. He holds a
diploma in business administration.

Michael Rieder, CEO of Altira Group: ´More and more investors want to
invest in Africa. And there are good reasons for this. According to figures
from the McKinsey consultancy company, the highest yields for foreign
direct investments are to be found in Africa. We want to provide our
clients the greatest possible access to the potential offered by this
dynamic economy - including equity market investments. In acquiring Jens
Schleuniger, we have gained a top-notch expert for developing this business
area. He knows the local markets in detail and is considered the Africa
pioneer of the fund industry.´

++ About Altira Group

The Altira Group is an owner-managed, exchange-listed asset management
company focusing on alternative investment strategies for institutional as
well as private investors. In that area, it concentrates on both
established as well as newly-developing, forward-looking growth markets in
connection with its core areas of focus

__ German ´Mittelstand´ & Restructurings
__ Renewable Energies & Natural Resources
__ Africa.

Olaf Meier
Head of Investor Relations
T +49 (0) 69 . 719 12 80 - 123 begin_of_the_skype_highlighting              +49 (0) 69 . 719 12 80 - 123      end_of_the_skype_highlighting

End of Corporate News

28 January 2011

Dr.Henry Tabe's "The Unravelling of Structured Investment Vehicles: How Liquidity Leaked Through SIVs

Lessons in Risk Management and Regulatory Oversight

The Unravelling of Structured Investment Vehicles charts the course of SIVs from their origins in the late 1980s to their eventual collapse in the wake of the crisis, highlighting critical factors that contributed to the sector’s demise. The book is divided into three parts. Part one contains Chapters 1 and 2 covering the themes of introduction, overview, genesis and evolution of the sector. Part two contains Chapters 3 to 7 and addresses the structure and operations of the vehicles. Including such details, it is hoped, will enable the reader to appreciate that little in the establishment, management and operations of the vehicles clearly presaged their demise. On the contrary, it is hoped that the reader will see, through such details, that the vehicles were operated in a similar manner to most banks and asset management companies and perhaps more efficiently than many firms that survived the crisis. This leads to the question of what went wrong, which the third part of the book, running from Chapters 8 to 10, seeks to address. This part also explores the lessons that can be learned to prevent the annihilation of whole swathes of the global capital markets in future crises and the adverse consequences of such annihilation for the global financial system and the world economy. . ...
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