Long-term planning informed by entrepreneurship can get rid of land barons
The rise of land barons has become an enduring trend and topic in many agriculture-driven African economies over the past few years. In fact, this trend has grown to the extent that in Zimbabwe there are more than five types of land barons. Increase in land barons can largely be attributed to lack of long-term planning around the use of natural resources such as land. In most African countries, national budgets focus on service provision, infrastructure and salaries for civil servants.
There is no attention to investment planning anchored on the four key factors of production:
Capital (finance) – which is emphasized by policy makers through budgets.
Land – in its physical form and natural resources – what long term plans do we have for land which is an unadjustable resource?
Human resources – people with their skills, knowledge, passion and aspirations.
Entrepreneurship – This is very important as it relates to the establishment of enterprises on land. What long-term plans are there on entrepreneurship development? When colonialists came into Africa, they set up long-term plans specifically around entrepreneurship and industrial development. Every town was carefully planned with areas designed for residential housing, areas for heavy industries, areas for light industries and so on. Long-term plans also existed for every open space.
The rise of MSMEs and its implications
In countries like Zimbabwe, the collapse of large-scale industries and emergence of Micro, Small & Medium Enterprises (MSMEs) has created huge demand for land to establish enterprises. During the time most people were employed in big formal industries, there was no serious demand for land to be used as trading space. But following retrenchments and economic down-turns, most people moved into the MSMEs sector, triggering high demand for trading space or work space. On the other hand, owners of large-scale industries that have collapsed continue to hold onto land on which their factories sat. Those retrenched have gone to work in spaces originally designed for other uses like recreational purposes.
Policy makers are yet to see that high demand for land and trading space is giving birth to land barons. As long as demand outweighs availability and policy makers are not generating solutions, land baronship will not end. In agricultural markets like Mbare in Harare where 153 market stalls were set up and registered with the municipality when the market was established more than 50 years ago, increase in demand for trading space has seen each market stall accommodating 5-10 traders renting space from one individual whose name is registered by the municipality. This means 153 registered market stall owners have become space barons for at least 1500 traders. All this is due to high demand for land to establish enterprises not only due to passion by individuals to start an enterprise but as a last resort for many people to earn a living.
Infiltration by politics
Political infiltration has worsened within constrained ecosystems where demand for land and space is rising. With local authorities losing their policies and power, political power has taken over the governance and management of local authorities to the extent that politicians are now the governors and owners of urban land and markets. Traders are obliged to follow what political leaders are saying but these local political leaders have become land barons who charge an extra fee from traders that are already paying rentals to local authorities.
Another related issue on the demand side is infrastructure development for the fast-growing young generation. The issue is now stretching from production zones or rural areas to towns due to lack of clear national plan and guidance on land use. With increasing urbanization, some previously rural business centers like Domboshava near Harare are rapidly urbanizing but the original plans for Domboshava before it became a residential area have remained unknown.
Traditional leaders becoming land barons
Traditional leaders have become another version of land barons. Abusing their roles as custodians of traditional land, they are now loosening traditional laws and values which previously stipulated that they should not sell communal land. They are now facilitating and authorizing sell of land that was not designed for residential purposes. Traditionally, these leaders would only allow people to rent land in communal areas but not sell. Now the village heads (Sabhukus) are willingly partitioning land and giving it to new people from anywhere. Some of the land being partitioned was traditionally set aside for livestock pastures and rituals like rainmaking ceremonies.
While urbanization is now starting from rural areas, developing residential areas is taken as a national issue yet residential development is not really an economic driver. Building houses on land meant for agriculture does not contribute to Growth Domestic Product (GDP). As financial institutions like banks and pension funds evolve into another brand of land barons, urban and peri-urban land that was meant for food production is being converted into residential areas. Converting areas like Nyabira near Harare, with high potential for food production into brick and wall investments has several consequences.
What is the cost benefit analysis of converting an unexpandable resource like land into residential accommodation at the expense of food production? Some countries have long-term plans which see them demolishing existing structures and building flats. In countries like Zimbabwe, land for agriculture is being eaten by real estate yet the human population is naturally increasing. Eventually there will be more people with houses but no food. The development pathway for houses is being pushed by the demand for accommodation not demand for houses. That is why property owners are turning their houses into businesses through rentals.
By taking advantage of the demand for accommodation and business space, property owners have also become land barons. Shopping malls that are mushrooming in big cities like Harare are for consumables and have nothing to do with industrial development which is more important for socio-economic development. The original Central Business District is now being turned into a cash cow by property owners who are demolishing original buildings into malls in response to demand for trading space. It implies rentals-driven land barons are becoming another form of land baronship as demand for residential and trading pushes up prices. This is an undefined form of corruption because rules that used to gazette rental charges that can be charged in a certain area are ignored. Property owners are doing what they want with their properties, which is why you can even see a surgery in an area where it would not be set up if rules and by-laws were really followed.
Land barons by leasing
Leasing of agricultural land has become another serious version of land baronship. If all land belongs to the state as is the case in Zimbabwe, what is the purpose of giving an individual 5000 hectares when that individual can only use less than 100 hectares? In rural Africa, a household with six members can survive on less than 20 hectares and is able to send children to school as well as meet other needs. Why should individuals benefit from leasing land that belongs to the state? It is wrong for a few people to benefit by earning a living from national assets while the rest wallow in poverty.
In the past, the national planning system designated farms by specialization – exports, livestock, horticulture for domestic, export, commodities for exporting. Now planning is left to an individual based on his/her capacity or lack of it. Land suitable for export crops is now seen producing cabbages. Disorganized production is forcing land owners to lose interest in careful planning and monitoring of land uses.
Towards a capitalist state
These trends demonstrate the extent to which some African countries are becoming capitalist states where demand determines the price of everything. However, this is too early to be allowed in countries like Zimbabwe that are in the middle of transitioning from a colonial to home-grown economy. As demand for properties and services is pushed to government and government does not respond, people with high income amass more power to influence policies, for instance, powerful people and bankers start influencing the re-purposing of land intended for agriculture to real estate instead of supporting agriculture and building food markets.
How all this affects agriculture and food systems
Where land barons dominate, they withdraw money from an ecosystem and re-purpose it for their own alternative uses. For instance, they can take money from agriculture and put it in residential housing, exploiting the increasing demand for accommodation and work space. A telling example is in mass food markets. If traders buy commodities worth USD100 000 (which should go to the farmer), 10% goes to the land barons through rentals for trading space and that means only USD90 000 remains for the next cycle of trading. It means the money is being taken out for building properties not expanding agricultural markets in designated places. As money for agriculture decreases, prices for agricultural commodities are suppressed, pushing food producers into poverty.
The outcry resulting from high demand for land and space to execute entrepreneurship is calling for revisiting of the whole planning on fixed resources like land. Emerging entrepreneurs like young people have skills, knowledge and passion for entrepreneurship but without space they cannot practice what they know. Where one of the four factors of production suffers, the other three factors are also affected. For instance, if land is not addressed it affect entrepreneurship, which also impacts human resources as people lose jobs. Since capital is not even being provided to MSMEs, they are using their own capital drawn from their ecosystems and value chains.
Deep research is required on how development approaches affect each other, especially use of fixed resources like land which have competing uses with long-term effects. For instance, what are the long-term impacts of land being destroyed by mining activities? What is the cost benefit analysis of extracting gold to the point that the land from which gold is extracted will not be reusable for agriculture? What damage does 1kg of gold have on land, food, biodiversity and other needs?
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