Biofuel Development and Large-Scale Land Deals in Sub-Saharan Africa

Africa's biofuel potential over the last ten years has increasingly attracted foreign investors’ attention. We estimate the determinants of foreign investors land demand for biofuel production in SSA, using Poisson specifications of the gravity model. Our estimates suggest that land availability, abundance of water resources and weak land governance are significant determinants of large-scale land acquisitions for biofuel production. This in turn suggests that this type of investment is mainly resource-seeking and investors might see land governance weaknesses as a way to access land and water resources at very favorable conditions. Results are robust to different specifications.