- Posted in: Local Business
Why Saudi Arabia needs African agriculture
The leasing or buying of farmland in Africa by foreign governments and companies has been a heated topic over the past years.
Fahad Bin Abdulrahman Bin Sulaiman Balghunaim
“A more controversial element of renewed interest in African agriculture is the leasing or purchasing of land on the continent by foreign institutions, particularly as land rights are rendered problematic by the fact that only between 2% and 10% of land on the continent is formally owned (most of which is in urban areas) and the vast majority of agriculture on the continent is exercised by smallholder farmers,” said Standard Bank analyst Simon Freemantle in a report published last year.
Gulf states have been some of the major investors in African farmland. According to Standard Bank’s report, major investments include those by state-owned Saudi Star in Ethiopia (where the firm, which already owns several farms in the country, is hoping to invest a further US$2 billion in the next few years to develop 500,000 hectares of land for agricultural production), and, in Sudan, where the Qatari Investment Authority’s Hassad Foods in 2009 signed a deal to develop land in the north of the country.
During the recent World Economic Forum on Africa, held in Ethiopia’s capital Addis Ababa, Saudi Arabia’s minister of agriculture, Fahad Bin Abdulrahman Bin Sulaiman Balghunaim, explained that the Saudi government has prioritised water security over water intensive local food production. “That is why we decided in Saudi Arabia to phase out our growing of locally produced wheat. By 2016 the government will not buy locally produced wheat.”
Because of the current high spikes in food prices, the Saudi government is encouraging its “private sector to go out globally, and participate and increase food production”.
He said that transparent investment environments will attract foreign business to Africa. “It is extremely difficult to expect the private sector to be pushed into an investment. We really have to work very hard to lure the private sector. The best way to lure the private sector is to really have a transparent environment for investment. [A] clear judiciary system. And once you have that, believe me, business communities will fight to come into Africa.”
“African leadership has a clear vision that agriculture is probably the most important [industry] for development in Africa. We Saudi Arabia share this vision and we offer our partnership on equal basis, and we will be very happy and proud to partner with Africa in the development of Africa. This will bring prosperity hopefully to Africa, and will also help us in Saudi Arabia to protect our food security,” the minister added.
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