Large Scale Foreign Land Deals and Agricultural Trade in Africa

Abstract

This study investigates the implications of foreign land deals in Africa especially with regard to agricultural trade. It is motivated essentially by large scale foreign land deals in Africa, Latin America, Central Asia and Southeast Asia. The empirical model adopted is based on institutional development theory and estimated using the Generalized Method of Moments (GMM). The study found that large scale foreign land deals (LSFLDs) impact negatively on agricultural export in selected countries and the indexes of institutional framework used were found to be significant. Likewise, agricultural land becomes highly significant with relatively larger magnitude when interacted with institutional indexes. This therefore implies that as more agricultural land is acquired, agricultural export tends to dwindle and incidences of food insecurity are heightened. The evidence from empirical investigation suggests the need for controlling the issue of massive foreign land deals through viable institutional framework, which can be engendered by building sound legal and procedural measures that will protect local rights and take into account the aspirations of local farmers and the welfare of citizenry.