Inadequate water rights governance threatens to complicate investments in African farmland, a report from the International Institute for Sustainable Development has found.
Foreign investors often enjoy better guarantees to water access than local smallholders, as a result of favourable deals with local authorities and protection from international investment treaties, the report said.
African authorities frequently fail to stipulate limitations on the rights of owners of land with prime water access to use water that might otherwise go to neighbouring properties.
As foreign investment dollars pile into African farmland with good access, the fear is that scaled-up operations on water-rich land could monopolise water resources, freezing out operators without direct access to sufficient water.
“Many agricultural investment contracts between investors and host states do not expressly mention or deal with water, let alone provide for water fees or for the periodic revision of allocation,” the report reads.
Contracts and regulations that do place limitations on the water volume an individual operator can use rarely enforce them over the life of the contract.
“Foreign investors may form a legitimate expectation for continued access to the water necessary for agricultural production if the contract does not expressly limit water use, or provide for periodic review of water allocation or access,” the report finds.
The resulting regime creates a situation where authorities must choose between honouring contracts with foreign investors and threatening the livelihoods of local subsistence farmers.