The impact of foreign land acquisitions on Africa virtual water exports

Do Foreign Land Acquisitions (FLA) in Africa increase the use of water? This paper provides empirical evidence about the impact of FLA on the water content of goods exported from African countries. A dynamic panel gravitylike equation is estimated to explain the pattern of African agri-food exports, of total Virtual Water exports, and of the green and blue Virtual Water components. Results suggest that FLA in African countries increase exports and that, by changing the composition of traded products, they imply an increase in overall water consumption both green and blue. However, a differentiated pattern emerges depending upon the origin of the investing firm. While investments coming from North and South America tend not to affect the water content of African exports, this is not the case for FLA from other parts of the world.

Automated summary

Foreign land acquisitions in Africa increase exports and water consumption of goods. The impact on water content of African exports varies depending on the origin of the investing firm.