Africa- the last frontier!





Investors may favor land purchase or long-term leasing where economies of scale are significant or major infrastructural investments such as roads and ports are needed. While the current preoccupation is to buy land since titled ownership of assets is seen as most secure, there are many arguments against this from the point of view of the receiving country. It is also not clear that it is necessary or desirable even for the investing partners. If it is acknowledged that international investment might make a positive contribution to raising productivity in agriculture, the question arises as to what policies might help to maximize the positive contributions while minimizing the associated risks. Acquisition of land does not necessarily provide immunity to sovereign risk and can provoke political and economic conflict. Other forms of investment such as contract farming and out-grower schemes can offer just as much security of supply.

Often investors/lessees promise several opportunities, including a technology transfer to stimulate innovation and productivity increases; quality improvements; employment creation; backward and forward linkages and multiplier effects through local sourcing of labor and other inputs. Even an increase in food supplies for the domestic market and for export is possible. However, these benefits will not come automatically, and it will take efforts of both investors and recipients of investments to realize the full potential of land deals. Above all, it requires an understanding that collaboration promises mutual benefits.

Interested investors/lessees (land claimers) can register with WAL at an annual fee of $1,500.

Lessees receive monthly updates of available land offers and can apply for an option to lease any dimension available. WAL will provide a draft Deal-memo to the Lessee and the Landowner.

The agreement between the Landowner and the Lessee are to the sole responsibility of both parties and does not automatically reflect the opinion of WAL.

Investing Land claimers should be aware of the principle that landowners agree to sign a Deal-Memo under objective of a 50-year lease agreement with an annual start lease of $10.00/ha ($4.00/acres) and annual index/inflation correction of approx 2.5%. There are land fund in the UK who pay $300 to $500/ha for farmland in Zambia about a tenth the price of farmland in Europe or the United States. It is known from practice that e.g. rice production can bring up to $350/ton profit and oil palm the same. A lease-fee of $10/ha still is very modest compared to the enormous potential profit each hectare can bring. That is what investors should keep in mind and also that the lease price should reflect responsibility and respect for the future generations of Africa.

Investing Land claimers have to pay a Good Faith sum to the landowner of $1.00/ha ($0.40/acre) for a one (1) year exclusive option on the dimension of land to be agreed upon.

If the lessee does not enter into a final agreement with the landowner within one (1) year after signing the deal-memo, the option automatically expires.

WAL charges a fair commission-fee from the landowner per successful transaction.

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