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February 21, 2012

Land conflicts cause South African sugar investor to abandon Tanzania for Mali

A subsidiary of South African sugar concern Illovo has given up a ten year effort to set up a plantation in Tanzania over long running land squabbles with locals. The Tanzania Daily News reported in January that the company is now seeking to establish the operation in Mali.

Kilombero Sugar Company had initially planned to invest in about 8,000 hectares out of a potential 23,000 hectares for cane cultivation, but the endless compensation claims from locals them decide the project was more trouble than it was worth.

The Sugar Board of Tanzania (SBT) is reported to have said the total land, if fully developed, had the potential to produce 240,000 tonnes of sugar every year. Tanzania suffers from periodic shortages of sugar which have to be plugged with imports.

Many villagers had refused to vacate the land, and others engaged the courts in long-running disagreements over fair compensation for their land. An agreement by the villagers in 2011 to seek an out of court settlement to the dispute was achieved when the investor had apparently lost interest.

An SBT official is reported to have ‘blamed politicians for instigating confrontations between villagers and the investor.’

A company official said Kilombero had given up its efforts to set up the plantation in Luipa, Kilombero District of Morogoro Region and was pursuing opportunities in Mali, which “has friendly investment policies and good incentives."

An editorial in the Daily News put the blame on government for not compensating the villagers as stipulated in the country’s land laws.

Authorities are making fresh moves to attract new investors.

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