Congo farm law seen hurting foreign investment

written a letter to the government calling the law, which is set to go into effect in June, “discriminatory”and a “catastrophe” and appealing for it to be amended.
“Everyone says to themselves, today they start with semi-nationalisation, and then one day we’ll move to total nationalisation,” said Paulin Mbandala, a Congolese lawyer specialising in agriculture.
The Congo law, passed in December shortly after a chaotic presidential poll, aims to use tax breaks and other incentives to boost agricultural output in a country with enough cultivable land to cover Germany twice.
Only 10 percent of the land is in use and the country has been a net food importer since the 1960s due to decades of neglect, conflict and corruption.
Farmers and activists alike had been pushing for years for the government to pass the first ever agricultural law to revive the sector.
Since the law’s passage, however, agribusiness companies have expressed concern over an article that says farms must be owned by “a person of Congolese nationality or a Congolese legal entity whose shares, if applicable, are majority-owned by the Congolese state or by nationals”.
Several of Congo’s existing agricultural investors, including a unit of Canada’s Feronia, said the law has created uncertainty over their projects and would likely stifle new investment.
New investments are unlikely if the law is not amended, said Agnes Kasongo, managing director of PHC, an oil palm operation majority-owned by Feronia.
The company produced more than 6 500 metric tonnes of palm oil last year and had plans to double the amount of land it cultivates.
“I don’t think that Feronia will invest further if the law is not amended,” Kasongo told Reuters from her office in Kinshasa’s dilapidated port area, where farmed produce used to arrive by river from the interior of the country before war during the 1990s and corruption saw the sector collapse.
“I don’t understand the law (article 16), the Congolese do not have money to acquire the land,” she said.
Officials from several other companies told Reuters they would reconsider investment, but asked not to be identified for fear of running into problems with the government. — Reuters.