Scramble for Africa’s Resources: Role of BRICS countries (Published 2014)

Introduction

Since the beginning of the 21st century there has been an increased expansion of new investments in Africa not just by the previous colonising nations (former European Union colonial powers), but also by emerging economies known collectively as the BRICS countries (Brazil, Russia, India China and South Africa) as well as other relatively smaller emerging nations from the Middle East (Saudi Arabia, Kuwait and Qatar) and East Asian countries (Malaysia, Indonesia and South Korea). Although the phenomenon of an increase in rural investments is global and not limited to Africa, the destination of 40% of the investments has been Africa. Agribusiness and extractive industries have rapidly spread across the globe since the global financial and food crises of 2008. The net effect of such investments has been to take food production out of the hands of farmers and local communities. The denial of land to smallholder farmers through displacement of communities without adequate compensation is creating a serious food insecurity problem as they are pushed from fertile land into barren land unsuitable for small scale agricultural activities that have for generations’ sustained livelihoods. These rural investments often referred to as “Land Grabbing”, have become an incontestable threat to the livelihoods of smallscale farmers particularly in Africa where 80% of the population is dependent on small scale agricultural activities. In reality the new investments have commercialised agriculture through contract farming that induce farmers to switch to high value crops from food crops, consumption of imported food as a substitute for traditional foods, changes from natural forests to reserved land for tourism and private estates for the production of crops used for bio-fuel production.

Who are the largest external investors?

According to a Grain Report (2013), by the year 2012, 35 million of agricultural prime land has been leased to foreign companies in 66 countries over the past three years for food and alternative fuel production (excluding extractive industries). The most affected countries in Southern Africa were the Democratic Republic of Congo with 8.1m ha leased followed by Mozambique with **** constituting ****% of arable land. The top investors around the world are; UK(4.4m ha), USA (3.7m ha) and China (3.4m ha). Hence these empirical figures show that it is the foreign investors from industrialised countries led by the United Kingdom that are seeking land deals in Africa particularly in the Democratic Republic of Congo. It is estimated that more than half of the 56 million hectares of land sought after by foreign investors globally is located in sub-Saharan Africa. The Democratic Republic of Congo and Mozambique have the highest share of foreign investor driven land deals relative to total arable land of close to 50% and 21%, respectively (Africa Development Bank 2012). Within African countries, the urgent need to develop agriculture and the lack of financial support for capital intensive projects such as irrigation and infrastructure development aimed at improving productivity and creation of thousands of jobs to improve rural livelihoods, has facilitated large scale land deals.

Role of BRICS

The purpose of this paper is to demonstrate the role of the BRICS countries in the scramble for resources in southern Africa. As already depicted above, China features as the third largest investor in agribusiness. Since the turn of the 21st century the region has increasingly established economic (trade and investment) and social relations with the emerging economies, Brazil, China, India and South Africa (the BRICS countries). These relations have been hailed at a political level as a positive move demonstrating South-South Cooperation as opposed to the traditional resented North-South relations. These investments are taking place against a backdrop of increased pressure from industrialised countries on developing countries to open up their economies through multilateral (WTO) and bilateral (FTAs and BITs) negotiations. The new South-South Cooperation is not signifying implicitly a real change in the structure of the southern African countries and benefits to its people, but a continuation of the same relationship established by the European countries during the colonial era sometimes in a more brazen manner particularly with regards to labour and the environment. The BRICS countries have invested in the same extractive industries, mainly in mining and agriculture for export as raw materials to parent companies in their own countries. The scale and type of BRICS investments into southern Africa are given in appendix 1. The study focused in detail on 5 southern African countries (Angola, Mozambique, Namibia, Zambia and Zimbabwe), but where necessary it will provide evidence from other countries within the region.

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