As we noted in a commentary earlier this week, land tenure insecurity poses significant financial risks to investors. It also negatively impacts food security, economic growth, and natural resource management. Governments, multi-lateral organizations, donor agencies, and civil society are focusing greater attention on improving land tenure security. The private sector has also become increasingly cognizant of the financial risks of tenure insecurity and the importance of incorporating land tenure in strategic risk analysis. AEGIS Advisory, a consultancy that specializes in assessing and adjusting businesses’ exposure to strategic risk, recently published a strategic risk alert titled Agribusiness in Africa – land tenure risk. The report notes that “as outside businesses look for more land to exploit, the risks of land tenure disputes increase, leading to greater operating costs or, worse, the prospect of operations being suspended altogether.”
Aegis Advisory and Integro Insurance have also developed an index to quantify the level of strategic risk in the 40 largest emerging markets. As we have noted, an accepted and standard indicator for good land governance would help quantify risk and measure best practice.