Oxfam, a global aid and development charity, has warned against rushing to implement planned major investments in agriculture based on the public-private partnerships (PPPs) supported by a multi-donor alliance that Malawi is due to benefit from.
Donors have committed over $5.9 billion of multi-annual Overseas Development Aid (ODA) to further the aims of the New Alliance for Food Security and Nutrition in 10 African countries, including Malawi.
Under the deal, donors are moving towards partnership and co-investment with private sector, which in theory is creating incentives to private sector to open access to greater capital and technology to drive productivity and efficiency for African agriculture sector.
But a report issued by Oxfam in London this week titled ‘Moral Hazards’ warns on the risks of failure in poverty eradication and rural livelihoods improvement in spite of the effort.
“Governments in Africa are turning to large-scale partnership with donors and multinationals as more ambitious answers to African food vulnerability.
“But under the general enthusiasm, we need to know who will primarily benefit from this, but also who shoulders the burden of risk and lastly, how decisions are impacting smallholder producers,” queries Robin Willoughby, author of the report.
But Oxfam Malawi deputy country director Abi Akinyemi told Business Review that Malawi Government should not be in a rush to implement the new initiatives as the rich stand to benefit more than the poor.
“After decades of under-investment, donors and governments support mega agricultural public-private partnerships (PPPs) in Africa without assessing the effectiveness and potential of such initiatives. There are question marks on who really benefits from such an arrangement. We are asking why not invest in the tried and trusted initiatives?”
Akinyemi warned that the partnerships open up a huge risk of exploitation for the poor due to concerns on the country’s land laws and other policies.
“Government under PPP arrangements have to create ‘enabling environment’ for large-scale businesses, including tax, market and land transfer facilities to attract investors. Evidence from other industries in Africa, such as extractives, illustrates the need for caution.
“Although we did not do any full work in the extractive industry in Malawi, there are concerns, for example, that companies such as Paladin did not always behave in a manner of high social corporate responsibility. We have a problem of Land Bill and we feel there is a high risk of exploitation,” she said.