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Mutually Beneficial Engagement between Local Communities and Large Scale Investors


Are there ways in which local communities can benefit from hosting large-scale land investments? This question forms the basis for a project on land in Africa, in which LUCSUS researcher Genesis T. Yengoh is involved.

Genesis says that over the last few years, there has been a large increase in the amount of land that has been acquired by investors and converted into crops for biofuel in Africa. The argument for this development is that there is plenty of land on the continent and that countries in Africa need investment. The people whose lands are engaged in this large-scale projects are often promised jobs, schooling for their children, and the development of local infrastructures such as roads, hospitals, and others. 

However, he notes that multiple studies have shown that it is not easy to create economic opportunities for local communities: often the companies cannot employ all of the household heads whose lands are engaged in the projects, those who end up being employed are done so on very short-term contracts and are not paid enough. Skilled staff who occupy better positions in these companies are hired from outside host communities as local people lack proper training and qualifications to occupy such positions.

– Large-scale investment is a very, very complex issue. It is often based on decision-making processes where locals are not included. They are often left out of discussions around compensation for the land, and the length of the lease, he says.

Other issues involve payments for land leases being too small for local communities to survive on, and equality. Often leases are for 50 or 99 years, and thus there is no land to give to the children as they grow up and need land to settle and start their own households. Leasing land can also lead to rifts in families since many men who formerly depended on the lost land for employment have to travel to find alternative work in cities, leaving the women at home with the children. 

He notes that all taken together, there are many problems with how local people engage with large-scale investors today. Yet, more and more governments in Africa are now becoming aware of this problem.

– My aim with this research project is to explore how the engagement between large-scale investors and local communities can become mutually beneficial. This is crucial since this type of investment will continue to increase rather than decrease in the future. 

Under the project, he has identified four models of engagement that could be explored further, that he believes could greatly improve the relationship between local communities and large-scale investors. 

These models are examining how local communities can benefit from large-scale investments. They include: involving local communities directly with investments in the company; outgrower schemes; ensuring that the compensation is fair; and guarantees of fair living standards.

– The idea is that policymakers can use the research results in their engagements with large-scale investors in the future, he says. 

– I would like to see a situation where all stakeholders, such as policymakers, investment companies, and above all, local communities, analyze which model might be best suited to the people who live on the land, instead of applying standard lease agreements to all communities, he concludes.