Land is Not the New Oil: What the Nigerian Oil Experience Can Teach South Sudan About Balancing the Risks and Benefits of Large Scale Land Acquisition

11 February 2015

Recent global food price volatility combined with the growing use of agricultural land to produce biofuels has sparked a global scramble for land, with Sub-Saharan African countries serving as the main targets for investors. Derided as “land-grabbing” by those opposed to the practice, the phenomenon of large-scale acquisition of farmland by governments and private investors sparked a global debate since the global food crisis of 2008. Although international investment in agriculture plays a vital role in development and poverty reduction, large scale international investment poses some serious risks to both communities and international investors. Because there are no signs of this trend abating, governments and investors must take steps to mitigate risk and ensure investment will be beneficial to local communities, governments, and investors. As the era of international agricultural investment continues to evolve and grow, investors and governments should draw upon lessons from the scramble for oil and gas in Africa during the twentieth century. The story of oil and gas discovery in Africa has been, for the most part, a tragic one. Governments of oil producing countries proved unwilling or unable to protect their citizens from the negative consequences of foreign investment and many investors involved in the oil industry simply ignored the damage caused to communities and the environment. This article draws out lessons from the experience of foreign investment in the Nigerian oil sector in the later part of the twentieth century and applies the lessons to the current situation of large-scale land investment in South Sudan. The risks posed by large-scale land investment in South Sudan are enormous to both communities and investors. Yet, this article argues these risks are not insurmountable. In order to meet the challenges, the Government of South Sudan should slow international investment to ensure the rights of landholders are secured, the challenge of corruption is addressed, and that land investment is integrated into its national development and food security strategies. Investors must likewise take efforts to secure their investment against the risk of indirect expropriation, engage in meaningful consultations with communities, ensure investments contribute to food security, and practice corporate responsible practices.