Recent investments by banks in real estate highlight the increasing value of land as a commodity. The African Development Bank announced on January 15 that it had granted Egypt $70 million for agricultural development, specifically the Rural Revenue and Economic Situation Improvement Project (RIEEP). Further reinforcing the value of land, National Bank of Egypt (NBE) and Banque Misr, Egypt's two largest banks by assets, agreed to take real estate as repayment for public sector debt totaling hundreds of millions, reported Reuters. "There has been an agreement ... with the public sector companies that we would take assets as settlement for the public sector debt, Banque Misr's Vice-Chairman Mohamed Ozalp told Reuters. While the RIEEP project has the dual purpose of agricultural investment and job creation - targeting small agricultural farmers and the working poor, the project will finance 5,000 small businesses and generate 60,500 jobs, in keeping with the government's goal of creating 750,000 jobs a year through 2012 - it reinforces the trend of agricultural investment. The desirability of arable land has risen following the global food crisis of 2007/2008, when food shortages threatened both adequate nutrition and political stability. Heightened land values - although the price of land in many impoverished African nations remains attractively low - have caused several Egyptian banks, private companies and government bodies to purchase agricultural land in Africa, in addition to focusing greater attention on Egypt's land resources. The Egyptian government bought Sudanese land near the border town of Wadi Halfa in 2008 at the peak of the food crisis. At the time, Agriculture Minister Amin Abaza described the investment as a "joint project to help both countries become self sufficient in wheat. Officials, however, said 4 million extra acres of land would be required to cover the wheat deficits of the two countries. In the case of Sudan, Egypt's neighbor, shipping costs and import logistics are minimal. However, further flung investments begin to raise questions of feasibility, such as the National Bank of Egypt's investment in 20,000 hectares in the Afar region of Ethiopia, an area known for livestock. In addition, farms owned by the Egyptian government are already operating in Zambia, Tanzania and Niger, according to an official at the Ministry of Agriculture. Egyptian officials and representatives from these countries describe a "win-win situation in which Egypt assists in infrastructural development in order to efficiently harvest and obtain crops grown abroad, from which the host country benefits logistically and monetarily. However, private investors, while in a similar position to improve infrastructure, cannot give the convenient excuse of a hungry population to feed. Egyptian private equity firm Citadel Capital and investment bank Beltone Financial both purchased agricultural land in Sudan; these and similar investments have drawn criticism as weakening the food security of countries that already fail to provide food for their own populations. Egypt sits on both sides of the issue, as both an investor in sub-Saharan Africa, and an object of interest for international investors looking for land. A Saudi Arabian consortium of agricultural firms called Jenat was allowed to buy 1,000 hectares of Egyptian land to produce barley, wheat and livestock. Saudi Arabia's agriculture minister announced last March that $40 million would be invested in food cultivation in Africa. Mohamed Abdel Aziz, an agriculture specialist with the Rajhi International Agricultural Investment, a Riyadh-based company, confirmed that Egypt's ministry of agriculture had permitted their firm to purchase land in Upper Egypt. "The Egyptian government gave us land to grow barley wheat and corn, Abdel Aziz said in a phone interview. Egypt's fertile soil has been largely responsible for the large amount of food cultivated in the limited land resources. Pressure from salination damage and increasing urbanization - claiming 31,000 acres of farmland a year - has made Egypt's agricultural resources ever more valuable. The issue of selling land to external companies, as well as outsourcing crop growth to foreign countries, becomes still more complicated when considering that one third of Egyptian children are malnourished, according to a study by the Ministry of Health and the UNDP. Santiago Herrera, chief economist at the World Bank in Egypt, explained that land resources, if managed responsibly, will have increasing value for countries that possess them. He warned however, of the danger that countries selling land "don't do the cost/benefit analysis of the transaction .[and meet] the demand of local population. Herrera, of the World Bank, suggested that deals which only lease the land rather than sell it, a successful model he'd observed in Ukraine, would allow countries some measure of control, should the deal not produce the hoped-for benefits. Herrera acknowledges that food is a sensitive topic, but maintains that country's with valuable and excess land resources have the right to profit from it. As Egypt straddles the barrier between purchasing arable land abroad, further developing its own land resources, and selling its land and food resources, its ability to maintain food security in the face of increasing demand remains to be seen.
