Written by BY ANDREA BOHNSTEDT
Friday, 11 May 2012 23:53
Last month, I stumbled over a small news item on a Tanzania security firm’s website. They noted that ‘an uneasy situation (had) developed in the Arusha area of Tanzania with the incursion of villagers onto privately owned land’. The reasons behind this were twofold: on the one hand, ‘villagers became increasingly distressed at the lack of grazing and water on their own smallholdings and began encroaching mainly to cut grass.’ But there was a political element to this, too: ‘The situation was exacerbated by political rhetoric in which opposition candidates vying for local seats allegedly promised villagers carte blanche access to large areas of land some of which is held by Tanzanian registered companies and others by individual landowners. (…) villagers took them at their word and promptly broke down fencing followed by wholesale invasions. There followed a tense week of direct threats, localised burglary and rioting.’ The security firm noted that the police and the local authorities, despite their limited resources, had handled this well and decisively.
Land rights are a tricky issue that I’ve been mulling over for a while, and this sounded like a fairly serious incident. I headed over to Google to see if I could find out a bit more. There was very little in English, which struck me a bit odd – this is, after all, quite an important piece of information for anyone who has invested in Tanzania, or is thinking about doing so. And Tanzania is seeking investors in areas that require land: commercial agriculture, mining and other extractive industries.
A friend who lives in Tanzania offered a slightly different perspective: The land in question was the Dolly Estate. The owners were, he said, looking to develop a high-end gated community, and may not have paid enough attention to local community relations when planning their investment: ‘Firstly there isn't enough water on the estate for their needs. And secondly, they have walked into about 100 years of history and resentment. Land issues resonate widely. So plonking a thirsty golf course, polo ground and posh housing into the middle of such a place when it is already facing water stress: what did they expect?’ In addition, he said, it had not only been the opposition, but also the ruling CCM who had promised land distribution in the recent by-election campaign.
There’s the hard and fast take on this: If you have a legit land title, then you should have the right to keep other people off your land. Also remember that Tanzania has been more successful than Kenya in developing high-end tourism, i.e. generating more revenue from each tourist, which in principle should allow them to keep the numbers down and, therefore, put less pressure on natural resources. And this might possibly require some investment and exclusivity. But of course it’s not that simple: For anyone who has no water and animal feed and sits on the other side of a fence looking at people in utter comfort, these legal niceties don’t matter so much.
I’m glad to see that the police and local authorities appear to have handled the Dolly Estate situation well and decisively. But this is far from over: This week, the Tanzania Daily News reported that in late April, 40 people ‘armed with bows and arrows, bush knives, double-edged swords, spears and axes’ invaded Mito Miwili Farm in Meru District owned by Pulses and Agro Commodities Company and ‘destroyed several items on the farm. The villagers set the farm house ablaze, destroyed four tractors and a large barn. The invaders allegedly also looted whatever they could lay their hands on. Authorities as well as farm owners are still calculating the value of both the vandalised and stolen property.’ The article also notes: Earlier on, in April armed villagers from Nduruma, Nkoanrua and Akheri invaded a farm that belong to Machumba Estate and attempted to divide it among themselves’ – reportedly because local politicians had promised land redistribution in the by-election campaigns.
Never mind the ethics – for any investor in that environment, taking solid advice on community relations, and investing in them, is sensible risk management. And I did wonder about the role of the government and its ability to make investors address such questions and manage public resources such as water: Tanzania wants and needs foreign investors as they can bring knowhow and finances that the country would otherwise not have access to. But this has to be a balanced effort: Investors want to know that their property rights are respected, but a government has to have a commitment to its own citizens: to ensure that any foreign (and, heck, local) investment is not detrimental, and that basic needs - like, say, people’s survival? – are met.
Even when investors do engage with the surrounding communities, there is clearly still a risk that the situation will be exploited by local politicians or local vested interests. This can be mitigated partly, but probably not entirely, by investing in local community relations. What worries me, however, is that most local politicians in the cases above don’t seem to have much to offer to improve the lives of their constituents apart from clearly illegal promises of land distribution that are detrimental for everyone.
Andrea Bohnstedt is the publisher of Ratio Magazine, an East Africa online business magazine, and works as an independent country risk analyst for several international firms. Andrea has an established track record in country analysis, having worked for Global Insight (now Global Insight IHS), one of the largest international country intelligence providers, as Africa analyst for three years.
Since leaving Global Insight, Andrea has written on business, economic and political risk issues for, amongst others, Dun and Bradstreet, Africa Practice, African Business, Africa Investor, Afrika-Wirtschaft, Control Risk Group, Oxford Analytica, Risk Advisory Group, and MarketWatch. Occasionally, Andrea gets asked what she thinks by media like BBC, CNBC, NTV, ITN, Bloomberg, and others.
Andrea holds a first degree is in business studies, and an MSc in development studies from the London School of Economics (LSE).
Find Andrea here @andreabohnstedt on Twitter