Category: Research

By: Dr. Linda Engström, Department of Urban and Rural Development, SLU

It is early morning when we leave a cool, overcast Bagamoyo town and the beaches of the Indian Ocean behind us. We are driving north-west towards Razaba Ranch, the area in eastern Tanzania where the Swedish company Eco Energy is planning to plant thousands of hectares of sugar cane and construct a sugar factory. Over the years, I have visited the area many times. This time, as well, I want to talk to the people living on the land targeted by the project, to understand their perceptions of it and the dynamics on the ground. The rainy season has just started and we expect a muddy, slippery trip. As we approach Razaba Ranch, we round a bend in the road and see that the Ruvu river has burst its banks, covering the bridge in slowly simmering, brown water. Two young men have seen the potential to make some money and are doing the important job of guiding cars through the water in order to avoid invisible rocks and to direct drivers to the shallow waters. Our car cannot pass through with us inside it. We pull off our shoes and start wading through the brown water until we reach across to the muddy road. Over the years, these floods have caused delays in project timelines, since they reduce access to the project site, and they have been repeatedly omitted in new timelines. We stop at one sub-village on the left side of the road, the side that is promised to the investor. We greet the village chair, people appear from nearby houses and some people travelling along the road stop, all gathering under a huge tree to talk to us about the planned investment, sitting on logs and, as the group expands, on yellow plastic containers. I know several of them by now, others are new acquaintances. Outside the nearest house are rows of white plastic rice bags packed with charcoal. In the meeting, we are told, among other things, that due to restrictions on agricultural practices while awaiting resettlement, more people have become dependent on charcoal production for their livelihoods. People are hoping that, after the ongoing rainy season, something will progress as concerns the resettlement as the roads are opened up again.

The Swedish sugar-cane project in Bagamoyo was initiated in 2006 through a Memorandum of Understanding between the company, then called SEKAB, and the Government of Tanzania. Since then, the original idea to produce ethanol for the European market has, for various reasons, changed into mainly producing sugar for the Tanzanian market. The plan has been to launch a 450 million USD project with a 300 million USD loan from the African Development Bank and a credit guarantee from the Swedish International Development Cooperation Agency, Sida. The project, based on a 99-year lease of the land, was marketed by the Swedish company executives with great promises. For instance, the project was to produce 130,000 tons sugar and 10 million litres ethanol annually, produce reliable electricity supply to 100,000 rural households. It would employ 2000 people and 10,000–12,000 jobs as spin-off effects, provide  13–18 million USD in annual revenue for outgrower farmers and provide the state with 30 million USD in yearly tax revenues. In all, it would reduce poverty and bring rural development.

However, when we visit the area this time, ten years have passed since project initiation, and there is still not a single sugar cane in sight. Timelines have been repeatedly postponed; conflicts over land have arisen, negotiations over compensations, floods and issues of resettlement have interfered with the process, bureaucratic procedures and unexpected external events have grinded down the expected simple, linear project implementation process – it encountered reality. All the while, major proponents of the project, such as Sida, the African Development Bank and the Tanzanian President at the time, Kikwete (2005-2015), maintained their support of the project. Sida even supported the project with 54 million SEK from the Swedish development budget. One could assume that the transaction costs for the Tanzanian government must have been severe. And all the while, the approximately 1400 people living on the land and using it for their livelihoods have been regularly informed to be ready for an upcoming resettlement. They have been encouraged not to invest in their land, nor any other assets; they should not plant perennial crops such as trees, since they will not be compensated for such investment upon resettlement. Some people were lucky to get training in construction or driving, as part of the international best practice that was pursued for the resettlement process. Some farmer men decided to send away their wives and children to relatives, where the future seemed more predictable, or quit farming and took jobs with the company for minimum salaries. Many farmers we talk to have stopped investing in their land and houses, and postponed development plans. As indicated above, charcoal production became an interesting alternative way of earning an income, with subsequent environmental consequences. Most of all, the uncertainty, the lack of complete information about what was happening, when and why, are factors that caused great mental stress and frustration. I often received questions about what was actually happening. For instance they repeatedly asked me if I knew whether the inflation rate was going to be considered for their compensation payments, since many years had passed since the evaluation of their assets had been performed. As a matter of fact, they did not even have the information about how much their assets were valued at in the initial evaluation.

Thus, while many of the project proponents referred to the project as “nothing has happened”, there was a myriad of events, processes, negotiations and impacts going on, both on the project site and outside it. Most notable is the profound livelihood effects the non-implemented project had on the people living in Razaba Ranch. Moreover, when the newly elected President Magufuli in 2016 decided to withdraw the land-rights of the company, Eco Energy decided to sue the Tanzanian government at an international center for dispute settlement in Washington to get the allegedly invested 52 million USD back. In all, these processes have impacted on relations of all kinds, between and within different involved groups of actors.

While unintended outcomes of failed development projects have been rather frequently discussed in development studies (see, for instance David Mosse’s “Ethography of Aid” from 2005 or Tania Li’s “Will to Improve” from 2007), to my experience, it is rarely being reflected in development policy debates. Rather, delayed or non-implemented projects risk ending up “under the radar”, where impacts are irrelevant to monitor or mitigate. Moreover, it seems sparsely reflected in sustainability criteria, such as the IFC (International Finance Cooperation) standards applied in this case. Therefore, risks of failure and its effects should be paid more attention in policy debates, especially since projects that never happened apparently can have profound, and even negative, impacts on all involved actors, not least the people assumed to benefit from them.

Engström, L.(2018). Development Delayed – Exploring the failure of a large-scale agricultural investment in Tanzania to deliver promised outcomes. (Doctoral Degree), Swedish University for Agricultural Sciences, Uppsala, Sweden.