Nearly half of investors in Africa have experienced disputes with local communities – new research

Almost half (46%) of investors surveyed in sub-Saharan Africa have experienced disputes with local communities over land, new research from the ODI and TMP Systems has found.

As part of an ongoing initiative to facilitate responsible land investment, experts have warned companies are failing to avoid serious risks both to themselves and local communities, even though it makes financial sense to do so.

They warned that the financial costs of such disputes are up to four times higher than the costs of mitigating them. Disputes, which cause significant harm and stress to local communities, can be avoided by engaging local communities who have claim to the land throughout the investment.

The Quantifying Tenure Risk (QTR) initiative has now spoken to nearly 90 agricultural companies and analysed a further 137 land investments in Africa and other emerging markets, such as South and Southeast Asia. It has further developed an economic modelling tool to accurately determine the potential cost of a dispute versus the cost of mitigating that risk in a bid to help companies avoid harmful investments.

Joseph Feyertag, Research Fellow in ODI’s Climate and Sustainability programme, said: ‘Our research shows that the financial benefits of doing it right far outweigh the costs of doing it wrong’.

‘We believe that this can demonstrate to investors that there are ways of mitigating risks, and that this can be done cost-effectively. This can facilitate much-needed investment in the world’s poorest countries and help them achieve the Sustainable Development Goals by 2030’.

‘In a time of rising commodity prices and investment in green infrastructure, there is a risk that investors rush to buy land without properly engaging local communities. It is vital that companies invest responsibly to avoid damaging people’s lives and livelihoods, whilst protecting their own financial interests’.

The QTR initiative is now looking to expand its work with investors and help them identify and mitigate other environmental, social and governance (ESG) risks, especially in low- and low-middle income countries.

Download the report here: https://landportal.org/library/resources/%E2%80%89-financial-costs-mitigating-%E2%80%89social-risks

For more information on the QTR initiative please visit :  https://landportal.org/partners/quantifying-tenure-risk

For more information or to arrange an interview with one of the researchers please contact James Rush on j.rush@odi.org.uk or +44 (0)7808 791265