Unjust Enrichment: How the IFC Profits from Land Grabbing in Africa
Eurodad member Bank Information Center in collaboration with Inclusive Development International, Accountability Counsel, The Oakland Institute and Urgewald, have released a report, Unjust Enrichment: How the IFC Profits from Land Grabbing in Africa. The report is the fourth installment of an ongoing investigation, Outsourcing Development: Lifting the Veil on the World Bank's Lending Through Financial Intermediaries, which follows the trail of IFC money globally and looks at how it impacts people on the ground in developing countries.
According to the report, Africa is in the grips of a land-grabbing epidemic. Nearly a decade ago, in the wake of the global financial crisis, food and commodity prices soared, creating an unprecedented moneymaking opportunity for investors. Large multinationals, in search of cheap land to grow crops and extract minerals, rushed to Africa to make deals. National policy makers and international development institutions, including the World Bank, have enabled this trend by promoting large-scale land investments as a catalyst for rural development. The IFC has encouraged governments to make land easily available to investors by setting up land banks and similar one-stop investment shops and it has also provided direct financial support for companies to develop large-scale industrial plantations.
The report brings the case of an area in the northeastern Guinea. Societe AngloGold Ashanti de Guinee (SAG), a subsidiary of the world's third-largest gold mining company AngloGold Ashanti, has interests in the region due the presence of gold. The IFC, whose mission is to fight poverty and support sustainable private sector-led development, is both indirectly financing and profiting from a project that is harming and further impoverishing the poor. This because AngloGold Ashanti received a loan from two commercial banks located in South Africa and one of them is a financial-intermediary client of the IFC.
It is also mentioned that IFC money is flowing to those kind of projects through the murky back channel of financial intermediaries, like in the oil palm plantations in Gabon and the export-oriented industrial sugarcane plantations in Sierra Leone and Zambia. The IFC’s exposure to these projects demonstrates the risks of financial-sector lending.