Nosy Be, the island-city in northern Madagascar, was once known as the city of sugar and rum. But that was over a decade ago. Today, the sugar industry in Dzamandzar struggles to restart as land-related problems grow in severity.
It is 12:30 p.m. in Ampasindava, a small, tucked-away neighborhood on the road to Dzamandzar, Nosy Be. At this time of day, everything stops. “It’s inhumane to make people work under temperatures reaching 34 degrees Celsius,” says Rudi, our local guide. The sight of passing “vahiny” (foreigners) piques curiosity but not enough to make the women and children watching from the shade leave their spots.
The settlement was built by the sugar company Siramamy Malagasy (Sirama) for temporary workers when the company was still operational. Now, the houses are occupied by those same people who pay an annual occupancy fee of 2,000 Ariary. The receipt from the Nosy Be municipality states that this fee corresponds to a tax on built property and land. Yet, these occupants are not owners—at least not officially.
Rabe Clément is one of the occupants of these small four-by-four-meter houses. Originally from the Bealanana district in the SOFIA region, about 300 km from Nosy Be, he has lived here since 1995 with his wife and four children. Currently the neighborhood chief, he is well-informed about land transactions in his area. His neighborhood is among the problematic parcels for Sirama. Much of the land is squatted by residents, whose numbers grow daily. “But we cannot stop them. It’s Sirama’s land office that handles this. Anyway, in real estate transactions, we [the local fokontany] have no say. We’re not even consulted,” explains Rabe Clément.
Regularization, Squatting, and Urban Expansion — Heading Toward Sirama’s Expropriation
Since September 12, 2012, when the Council of Ministers authorized the sale of part of Sirama’s land, state company executives began regularizing the situation of illegal occupants. “But since then, illegal occupations have only increased. Just last week [end of November 2018], we were informed that squatting is exploding in numbers,” says Rasoamahenina Mamy, Sirama’s acting general director.
This ministerial decision allowed the declassification of 694 hectares. But here is where things get murky. No one really knows what this declassified land will be used for. Accounts differ from one source to another. In 2012, company CEO Moana Essa told the press the land was already illegally occupied by residents, who must pay between 15,000 and 50,000 Ariary per square meter depending on the land’s status. When contacted for an interview, Moana Essa refused, saying he was no longer the company head and thus not concerned.
Later, it was said that the 694 hectares were declassified for Nosy Be’s urban expansion. Some claimed only part of this land was for city expansion. Others said 27 hectares would be allotted to laid-off sugar factory workers, with each worker receiving 400 m². Then-Prime Minister Jean Omer Beriziky recalled that land sales were never discussed except for workers needing housing after the factory closed in 2005, whose status with Sirama was never regularized.
Nosy Be is an economically promising island, with thriving tourism. This is one reason Sirama’s land sales soared in the “Ylang-Ylang” city. “In 1999, under Didier Ratsiraka, leaders began to envision Nosy Be as a tourist city. That’s when various schemes started,” explains Serge Zafimahova, founder of the Development and Ethics Club (CDE), who was part of the committee overseeing national company privatizations.
Shift to Tourism: Sirama’s Land Properties Undervalued
Nosy Be attracted national and international investors, with luxury hotels emerging. The island’s fate was sealed: sugarcane would no longer be its sole economic driver. Few foresaw that six years later, under President Ravalomanana, the sugar factory would cease operations in favor of tourism.
Well-informed sources indicate that 212 hectares, aside from the 694 hectares mentioned in the 2012 Council of Ministers decision, were grabbed by large luxury hotels. Most major infrastructures are actually built on Sirama land.
“Most of the land was acquired through adverse possession. We suspect large-scale corruption,” says Mamy Rasoamahenina. Nosy Be’s land and topography services have often used this argument to side with investors. Adverse possession means legally acquiring a real right after a certain period of uncontested possession, during which anyone can challenge the claim in court.
In response, a source within the local topography service claims that executives at the Nosy Be facility and some in the Antananarivo headquarters conspire to sell these land plots.
Serge Zafimahova, who closely followed state company privatizations, wields legal arguments against Sirama’s executives. According to him, “This company has no right to sell its assets. Law No. 2003-051 on privatization, Article 10, requires any transfer of company assets to be done by competitive tender. Selling to individuals, euphemistically called ‘declassification,’ is a form of privatization. Moreover, since the new owners no longer cultivate sugarcane, this is a clear diversion from the original activity, which contradicts the spirit of privatization.”
Oméga Rasetaharimalala, Director of State Properties at the Ministry of Territorial Planning, argues that Sirama is a corporation owning its assets privately, not state property. “The State has no say. Sirama’s land is titled private property,” he says, explaining that certificates of legal status show the entire 6,000-hectare property is registered under Sirama by court ruling.
Does Sirama’s corporate status and private property ownership give its leaders the right to sell its assets without hesitation? Eric Raparison from the Land Stakeholders’ Solidarity (SIF) disagrees.
“Though a corporation, Sirama is still state-owned, with 100% public shares. Why else would the Ministry of Finance validate the Board’s formation? Why would the Council of Ministers approve land sales if the State had no involvement?” says Raparison, accusing manipulation of the laws.
And if Sirama’s land no longer belongs to the State, how is it that the Ministry of Industry orders Sirama to allocate part of its land to a business operator? During our investigation, we obtained a 2018 letter from the current Ministry of Industry Secretary-General ordering Sirama to provide a parcel on title 550-BO to the company Leong, without further explanation. Sirama’s management claims the land was given in exchange for road rehabilitation works carried out by Leong in Nosy Be. Neither the Ministry nor Palm Beach Leong’s owner responded to our inquiries. However, our research revealed that Leong is close to former President Hery Rajaonarimampianina.
“I was a senior executive at the Nosy Be facility. I remember a minister asking me to help sell land to foreigners because it would bring big profits. But I stood firm to follow the law, which forbids selling state company land. I was then sidelined, demoted, and eventually dismissed,” recalls a former Sirama official who preferred to remain anonymous.
Suspicious Negotiations with a Surveyor Firm
To carry out “regularization,” Sirama hired Zaratany, a sworn surveyor firm based in Antananarivo. Unable to find any public tender notice for this, we tried to confirm the firm’s registration—unsuccessfully. Sirama’s management said only the Board contracted with the firm. The Board Chairman declined to meet us.
Zaratany handles the regularization of occupants’ situations, including administrative documents and boundary marking, paid per job upon invoice. Services such as delimitation and staking are also charged.
In Nosy Be, the firm is accused as the source of corruption in Sirama’s land sales. “I was charged 1,600,000 Ariary for staking my land, but nothing was done,” complains a woman in her sixties who filed and won an extortion case against the firm.
Other sources say Zaratany manipulates documents. “There are two regularization procedures: one for laid-off Sirama workers, the other for private individuals who grabbed land and must regularize it. Workers buy land at 5,000 Ariary per m², others pay 15,000 to 50,000 Ariary depending on location. The firm offers buyers a price between these scales and promises to find a proxy among laid-off workers to lower the price. They share the difference, letting buyers get land cheaper,” explains Anne-Marie (name changed), a woman married to an Italian who gave up buying land due to the scams.
She even claimed some executives within the Nosy Be establishment collude with the firm. “Raymond Bavimena, Director of Culture, is the most corrupt. Mosesy, head of factory maintenance, and Besinoa Pascal are always nearby. They handle sales and regularization files and leave their marks everywhere. They approached me once.”
We reached out to those named; they all denied responsibility for final land sale decisions, saying only the Board decides on title issuance. José Claude Razafindrazaka, Zaratany’s Nosy Be branch chief, insists they cannot manipulate files because the Board reviews land status on maps before deciding.
“If there’s suspicion of corruption, let them notify BIANCO [Anti-Corruption Bureau]! We’re clean. Besides, it’s the laid-off workers themselves squatting and selling Sirama’s land. And it’s us they try to sully,” Besinoa Pascal said angrily during an interview.
His claims have grounds. We uncovered a file proving a former site manager and laid-off worker named Toahiry sold a 16.10-are parcel to a Malagasy woman in 2008. The parcel belongs to Sirama’s title 548-BO. Yet, as mentioned, laid-off workers are only entitled to 400 m². How did Toahiry obtain such a large plot? At the start of our investigation, he admitted that seeing other managers grab prime plots tempted him. What he did not say was that he resold the 16.10 ares in 2008.
Where Does the Regularization Money Go?
Sirama’s general director says that since 2009, Zaratany has completed 40% of occupant regularizations—i.e., 40% of the 694 hectares. According to him, land prices range from 15,000 to 30,000, even up to 50,000 Ariary per square meter. We tried to estimate how much money Sirama has raised from land sales.
Without exact figures, we simulated using the lowest price: 15,000 Ariary/m². At this rate, selling 277.6 hectares would bring in 41.64 billion Ariary. That’s hypothetical, since Sirama no longer has a bank account; transactions are cash-based at its Isoraka (Antananarivo) office. “We make regular deposits to headquarters in Antananarivo,” says Nosy Be’s office head. “We handed over the partnership agreement funds directly to the Board Chairman,” adds Andry Fiankinana Andrianasolo, lawyer for Vidzar, the company that signed a deal with Sirama in 2015 to revive its operations.
Mamy Rasoamahenina reveals the revenue from regularization pays Sirama employees’ salaries—about 200 million Ariary monthly for 500 employees in Antananarivo, Brickaville, and Nosy Be. Fair enough. But 41.5 billion Ariary could have paid 208 months (17 years) of wages. Since 2009, Sirama paid 21.6 billion Ariary in salaries. If it had paid wages continuously since 2004, when it ceased activities (which it didn’t), it would have paid 31.2 billion Ariary. This leaves 10.44 billion Ariary unaccounted for. And this excludes transactions under the Vidzar partnership.
The Sugar Industry in Peril
Amidst this turmoil, Sirama’s sugar processing suffers a severe blow. Vidzar, a pioneer in Malagasy rum production, was supposed to revive the factory. But so far, nothing has happened. “We could not get the land promised in the partnership agreement. Worse, some plots we received plans for don’t belong to Sirama or have been given to another company,” Vidzar’s lawyer explains.
In response, Sirama’s general director says, “These properties belong to Sirama, and it does as it pleases. We are even considering terminating the contract because in three years, Vidzar has done nothing tangible on agricultural land or inside the factory.” Bitter, Mamy Rasoamahenina claims Vidzar is only interested in Sirama’s assets.
The situation worsens. No one admits Sirama faces a land problem. Everything seems fine, but soon the sugar company will have no land left as sales continue. The establishment of a dedicated land office specifically for managing Sirama’s land fuels this fear. Some believe its mission will end only when the last square meter is sold. Regardless of the company’s next partner, sugarcane fields will suffer as rampant construction hinders cultivation.
A story to follow closely…
