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Capital, Labour and the Future of African Land Relations

In a speech to the Labour Party Conference in Britain in 2002, Bill Clinton mentioned a recent trip to Africa:

I have just come here from a trip to Africa which provided me with all kinds of fresh evidence of the importance of politics…In Ghana…a new President is working with a great Peruvian economist, Hernando de Soto, to bring the assets of poor people into the legal system so they can be collateral for loans…¹

De Soto’s book ‘Why Capitalism Triumphs in the West and Fails Everywhere Else’ has had an important impact on the World Bank’s land agenda.² Whilst our eyes are trained on events in Zimbabwe, an equally important development in land matters is receiving next to no attention. Yet, the changes that are underway in land matters elsewhere in Africa are at least as important as the Zimbabwe land question.

For many African countries, the last decade has been the decade of land reform. Many countries – including Eritrea, Ethiopia, Rwanda, Tanzania, Uganda, Malawi, Zambia, Mozambique, South Africa and Namibia - are faced with new land laws which aim to liberalise land relations and encourage the sale, purchase and mortgaging of land. The World Bank is promoting the idea that land is important to both economic growth and good governance. It has recently published an important report on land matters, which sets out its agenda for the future. ³

The World Bank’s report is a reminder that the land reform debate in Africa is by no means over. It has been severely criticised by a number of organisations concerned with land issues in Africa. In 2002, the World Bank together with other donors such as Britain’s Department for International Development (DfID) held four international workshops to consult on the report. The process of consultation was marred by the World Bank’s reluctance to listen to civil society groups. The workshops were dominated by consultants chosen by the World Bank. This was perceived by many as an attempt to rubber-stamp the report. As a number of NGOs pointed out, this throws into question the legitimacy of the World Bank’s consultation. Groups working on land rights in Africa, including South Africa’s National Land Committee and Landless People's Movement, wrote an open letter to the World Bank criticising its approach and pointing out that this is not the way to decide future land policy.⁴ The report now forms the basis for coordinating the Bank’s approach to land issues. It will have an important influence well into the future. So far, these are not known and have not been debated.

The report sets out the World Bank’s plans to encourage small-scale peasant farmers to borrow money from banks using loans secured on their land. The World Bank believes that secure tenure and the availability of credit will allow farmers to improve their farm or start up small businesses. It believes that small farms are extremely efficient because they rely on family labour and, therefore, have very low labour costs. The World Bank believes that this land should be viewed not as a source of subsistence and shelter but as a source of capital.

The author has had the opportunity to carry out a detailed analysis of the report.⁵ It contains a number of assumptions which must be challenged. The World Bank aims to encourage the use of rural credit by small farmers because it is impressed by their agricultural productivity, that is, their low labour costs relative to output. It does not mention that this agricultural productivity is only possible because of the availability of women’s unpaid labour. In fact, the report celebrates the flexibility, motivation and low costs of family labour. It ignores the fact that women’s labour in the household and on the land is often based on quasi-feudal domination and on coercion rather than freedom. The idea that women’s agricultural labour is freely available as an extension of their reproductive labour needs to be challenged. Instead, the World Bank is seeking to build economic development on the fact that women will demand less in terms of wages and conditions than waged labour.

The report treats the household as an undifferentiated unit in which the needs and interests of men and women are the same. It ignores the fact that the family often functions as an ideological and material site of oppression. The availability of women’s unwaged labour within the family is a function of male control over women’s reproductive capacity. This has been the central focus of feminist writing since the 1960s. For the World Bank, another advantage of family labour is that it is more ‘motivated’ than waged labour because it is based on family ties. This ignores the fact that much of women’s labour is far from voluntary and that a great deal of coercion can be involved in gender relations. Rather than trying to get rid of patriarchal, feudal gender relations, the World Bank plans to encourage them in the name of economic development.

Another matter of concern is the fact that the World Bank says nothing about the consequences for households of defaulting on loans raised using land as collateral. There is a very real possibility that rural farmers will find themselves landless as a result of mortgaging their land. The World Bank has pushed for the privatisation of public services such as healthcare and education in Africa over the last decade.⁶ It is now promoting the idea that rural families should mortgage their land in order to invest in these previously public goods. This amounts to encouraging the poorest and most vulnerable to exploit their sole productive asset (i.e., land) to raise the credit by which to pay for these recently privatised public goods. The promotion of rural credit to pay for public goods, far from contributing to efforts to reduce poverty, as the World Bank claims, will ensure that it remains a persistent reality.

The World Bank has issued a warning: if we fail to formalise land relations we condemn land to the status of ‘dead capital’. In the view of the World Bank, land which is used only for subsistence is a ‘dead asset’ which holds back economic development. By releasing such dead capital we will liberate peasant farmers into the world of the market where they can use their assets to raise loans on the open market. In the words of The Economist:

…Africans find it hard to use what they have to best advantage because they lack secure property rights. Very few can prove that they own their land or their homes, because they do not have title deeds. This matters, because without a reliable system for ascertaining who owns what, assets cannot be used as collateral. In rich countries, if a farmer wants to invest in better seeds or bigger tractors, he can probably borrow the necessary cash using his land as security. If he fails to honour his debt, the bank takes the land. If all does well, however, his easy access to credit allows him to make his land more productive, which in turn increases its worth. Asset-backed lending is a crucial element in the dynamism of advanced capitalist countries. In America, for example, the most common way for an entrepreneur to raise start-up capital is by mortgaging the family home.⁷

Taking its cue from the World Bank’s global land policy document, the Economist argues that the future lies in a transition from peasant subsistence to petty bourgeois entrepreneurship. Although it is explicit about capital, however, it fails to make any mention of labour which, as I have shown above, is a crucial aspect of the land policy.

This approach to land has met with widespread approval amongst policymakers. For example, ideas about formalisation and the importance of land as collateral are beginning to have a considerable influence on policy making at the British Department for International Development. It is likely that a number of African countries will be studying de Soto’s project in Ghana. He has overseen the establishment of the ‘Foundation for Building the Capital of the Poor’ in Ghana, one of the stated objectives of which is ‘to establish a regional training centre in Accra for the benefit of other countries interested in the property reform programme.’⁸ The United Nations Development Programme (UNDP) has also given its support to this work.

The World Bank will continue to be a key actor in land reform. It will continue to hire technical legal consultants to draft new land laws which facilitate the liberalisation of land tenure and bolster efforts to ‘bring the assets of the poor into the legal system’.⁹ Civil society groups have not been effective in challenging the direction of land reform. Instead they have adopted a technicist and instrumentalist approach to land issues. Rather than debating and challenging the purpose of land reform, they have been largely reactive, commenting on new legislation and pressing for amendments to the law. It is also clear that bankers’ organisations have had a central place in determining the shape and content of Africa’s new land laws. The liberalisation of land markets and the promotion of formal credit provide unprecedented opportunities for commercial lenders in Africa. Their lobbying activities have had a powerful impact in many countries where they have tried to ensure that new land laws do not increase the risks entailed in lending. They will continue to exert influence in the future. Connected to this is the part which will be played by the African judiciary. Over time, the promotion of rural credit will receive concerted backing from international donors and African governments. It can be predicted that in a few years, the judiciary will be seeking ways to fulfil the demands of commercial lenders for certainty in lending.

The World Bank’s reluctance to allow us to debate its plans cannot mask the fact that issues of labour and of capital are now of central importance to land relations in Africa. The World Bank’s recent report is a reminder that, far from being over, the most important struggles over land relations in Africa lie ahead.

Former US President Bill Clinton’s Address to the British Labour Party Conference, October 2002. Full text available at <http://politics.guardian.co.uk/labour2002> (January 2003).

Hernando de Soto (2000) The Mysteries of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, New York: Basic Books.

World Bank (2003) Land Policies for Growth and Poverty Reduction, Oxford: Oxford University Press.

See www.nlc.co.za/pubs/wbopenletter02.htm. An important resource for those interested in land issues at the present time can be found at www.oxfam.org.uk/landrights.

See Ambreena Manji (2003) “Capital, Labour and Land Relations in Africa: A Gender Analysis of the World Bank’s Policy Research Report on Land Institutions and Land Policy” in Third World Quarterly 24, no. 1: 97-114.

See John Harrington (2003) “Law and the Commodification of Health Care in Tanzania” in 2 Law, Social Justice & Global Development Journal 2, available at <http://elj.warwick.ac.uk/global/issue/2003-2/harrington.html>

The Economist (17 January 2004) “Breathing Life into Dead Capital: Why Secure Property Rights Matter” in How to Make Africa Smile: A Survey of Sub-Saharan Africa , 10-11.

“Ghana: Foundation for Building the Capital of the Poor”, Accra Daily Mail 20 September 2002, available at <http://www.africaonline.com/site/Articles/1,3,4,49613.jsp> (December 2003).

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