Wikileaks: More details emerge on Ethiopia’s land deals

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A wikileaks cable on Ethiopia’s land sale deals provides some more information on what has been going on.  Some highlights are below:

The cable cites two reasons for the land sale that the government is undertaking. One is increasing productivity, and the other, generating “sorely needed” foreign exchange.

UNFAO and World Bank dispute government’s label of unused land. They argue this is grazing land and likely to negatively affect many populations. Cable says evidence of cattle stress already being seen.

The MoRAD official who spoke to the embassy staff conceded that the government’s ideological barrier (i.e. that all land belongs to the government) precludes using land as collateral to raise capital. Lacking sufficient local capital, it is therefore important to bring in outside financing. Presumably, this is not the only reason for the land sale, but this ideological barrier exacts significant costs on the farmers and grazers (including in this case loss of all rights to using the land for farming, grazing, or even accessing water sources).

Karaturi (Indian firm) is the largest commercial farmer.  Al Amoudi’s Saudi Star gets favorable treatment from the government.  Current investors are: US investments: 9% (mostly Ethiopian diaspora),  Europe : 16%(Germany, Netherlands, and UK are largest European investors), Asia/Middle east: 57% (of these India has 30%, Saudi 8%, Others (Israel, Pakistan, UAE) 19%) and others (not mentioned in cable) have 16%.

Both Karaturi and Saudi Star seek to order US machinery ($125 million worth by 2010 for Karaturian and $80 million for Saudi Star for 2009)  – also building alliances in the process.

Government has considered making changes to the lease rate. There appears to be great variation in leasing rates (according to the cable USD 321 per acre in Oromia and USD 0.35 in Amhara) [there may be an error here, perhaps the Oromia rate was $3.21 per acre??] The land seems to have been given away quite cheap. As investors were asked about potential revisions, one said they would sue the government, another, that he would leave the country.  One has to wonder how well thought out this policy was.  One would think leasing rates are one of the first things they would discuss once the decision to go ahead with the land lease has been made.

The cable calls Meles and the government crafty negotiators in the past and doubts that land is being given away. However, in an earlier paragraph lease rates as low as $0.35 per acre are quoted.  I guess technically a give away  would be $0.00 per acre.

Land stats:
Cultivated: 45 million acres
Small scale: 42.75 million acres
Large scale: 2.25 million acres
Identified for lease: 7.4 million acres

Locations:
Benshangul-Gumuz: 2 million acres
Gambella: 1.5 million acres
SNNPR: 1.4 million acres
Under review: 2.5 million acres

Current investmentse:
Europe : 16%(Germany, Netherlands, and UK are largest European investors)
Asia/Middle east: 57% (of these India has 30%, Saudi 8%, Others (Israel, Pakistan, UAE) 19%)
US investments: 9% (mostly Ethiopian diaspora)
Others: 16% (not mentioned in cable)

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