Category: Issues

More than 70 per cent of Africa’s estimated 1.2 billion people are said to be suffering from high unemployment, inequality and poverty. This is despite the continent’s huge, but largely untapped human and natural resources. Although, development experts blame this largely on inept leadership and corruption, they note that the time has come for governments across the continent to prioritise the maximisation of the abundant natural resources in their domain to put the continent on the path of sustainable economic development. OMOBOLA TOLU-KUSIMO reports.

It’s a disturbing paradox. Despite their abundant human and natural resources, virtually all the development indices in Nigeria and other countries in Africa have remained abysmally poor.

For instance, majority of Africa’s estimated 1.2 billion people continues to grapple with issues of high unemployment rate, income inequality and abject poverty, among others.

Inept leadership and unbridled corruption by most governments in Africa are said to be holding the economic growth and development of the continent down.

Rather than effectively harness their nature-endowed resources to develop their economies and become dominant players in the global economic scene, most African countries depend largely on foreign aid and loans to survive.

Weak democratic governance, lack of transparency and accountability in the management of natural resources, corruption, political instability and incessant conflicts, among others, are said to have kept majority of the people extremely poor.

Mismanagement of revenues from the few natural resources tapped has continued to fuel corruption, conflicts and poverty, which ultimately, hurt economic growth and social development.

Successive governments in countries across Africa have also not been able to pluck up the necessary courage and political will to build institutional capacity to curb the pillaging of the continent’s commonwealth.

The consensus of experts is that if African governments had built strong institutions, it would have helped in the inefficient and ineffective utilisation of the abundant resources and saved the continent’s pangs of poverty.

For instance, an October 2019 report by the World Bank stated that with good governance and transparent management, revenues from the continent’s extractive industries can reduce poverty and boost shared prosperity.

The report, which was accessed by The Nation, added that the extractive sector plays a dominant economic, social and political role in the lives of 3.5 billion people living in 81 countries, 51 of which are now compliant with the Extractive Industries Transparency Initiative,

The bank added that the extractive industries sector plays a dominant economic, social and political role in the lives of 3.5 billion people living in 81 countries, 51 of which are now compliant with the Extractive Industries Transparency Initiative (EITI).

The World Bank report, however, said many of these countries still face a myriad of challenges such as resource dependency and weak governance.

The bank, in another report, stated that “Sub-Saharan Africa’s opportunities are vast, and its challenges persistent. It, however, pointed that the continent, which is home to the world’s largest free trade area and a 1.2 billion-person market, is poised to create an entirely new development path by harnessing the potential of its resources and people.

But, average growth rates across the continent are not yet reflecting this sentiment. Growth in Sub-Saharan Africa is projected to rise to a modest 2.6 per cent in 2019, from 2.5 per cent in 2018, which is 0.2 percentage points lower than the April forecast.

However, this masks big differences between countries. Four of the fastest growing economies in the world in 2019 are in Africa: Cote d’Ivoire, Ethiopia, Ghana, and Rwanda.

The slower-than-expected overall growth in 2018 reflected ongoing global uncertainty, increasingly from domestic macroeconomic instability including poorly managed debt, inflation, and deficits; political and regulatory uncertainty; and fragility.

It also belies stronger performance in several smaller economies that continue to grow steadily. At the same time, the recovery in Nigeria, Angola, and South Africa—the region’s three largest economies—have remained fragile and are bringing down the regional average.

In Nigeria, growth in the non-oil sector has been sluggish, while in Angola the oil sector remained weak. In South Africa, low investment sentiment is weighing on economic activity.

Excluding Nigeria, South Africa, and Angola, growth in the rest of the sub-continent is expected to remain robust, although slower in some countries.

The average growth among non-resource-intensive countries is projected to edge down, reflecting the effects of tropical cyclones in Mozambique and Zimbabwe, political uncertainty in Sudan, weaker agricultural exports in Kenya, and fiscal consolidation in Senegal.

In Central African Economic and Monetary Community countries, which are also resource-intensive, activity is expected to expand at a modest pace, supported by rising oil production. Growth among metals exporters is expected to moderate, as mining production slows and metal prices fall.

Experts, however, say that several challenges remain and are holding back progress. According to them, public debt levels and debt risk are rising, which might jeopardise debt sustainability in some countries; the availability of good jobs has not kept pace with the number of entrants in the labour force.

Also, fragility is costing the subcontinent a half of a percentage point of growth per year; gender gaps persist and are keeping the continent from reaching its full growth and innovation potential, and 416 million Africans still live in extreme poverty.

As the world’s second largest continent, Africa is said to hold a huge proportion of the world’s natural resources. The commodities include energy (oil and gas); precious metals (gold, coal, iron); livestock (beef, pork, poultry); and grains (wheat, barley, corn, soya); Softs (sugar, cotton, wood, sugar, orange juice), among others.

The countries with huge mineral resources and extractive industries are Angola, Botswana, Chad, Republic of Congo (Congo-Brazzaville), Democratic Republic of Congo (DRC), Ghana, Nigeria, Sierra Leone, and South Africa.

A financial expert, Desmond Latham, during a presentation on “Overview of Markets in Africa” at the Sanlam Summer School for Financial Journalists 2019, stated that Africa accounts for 12 per cent of World’s oil, 42 per cent of its gold, and 66 per cent of world’s phosphates.

He listed others to include 44 per cent of world’s chrome, 82 per cent manganese, 95 per cent vanadium, 55 per cent cobalt, 88 per cent of its diamonds and 45 per cent of its bauxite.

He, however, expressed worries that despite these huge potential to lead the globe, over 70 per cent of the over 1.2 billion people in Africa still suffer from high unemployment, inequality and poverty.

However, initiatives like the EITI, Amnesty International, among others, have drawn worldwide attention to the need for increased transparency and accountability in the management of extractive industries.

As a result, a number of African countries, including Nigeria, Angola and Congo-Brazzaville, now publish financial and other information in the press and on government websites, including the results of audits and other assessments that have highlighted management weaknesses and other shortcomings.

Using Nigeria as a case study, findings show that the country was one of the first countries to commit to the EITI principles.  To date, its local process – the Nigerian Extractive Industries Transparency Initiative (NEITI) – remains the most ambitious and the most advanced.

According to NEITI, Nigeria has conducted and published independent audits of payments and revenues, and was the first to insist that information be published in a disaggregated fashion, making it possible to identify revenues company by company, category by category and well by well.

The country has gone further, commissioning and publishing external audits of the physical systems and business processes as well.

Recently, Nigeria’s National Assembly passed the Deep Offshore and Inland Basin Production Sharing Contract Amendment Bill into law.

In a statement made available to newsmen in Abuja, by the Executive Secretary of NEITI, Waziri Adio, NEITI has been agitating for urgent amendment of the law to forestall further revenue losses to the federation.

Adio recalled that in March 2019, NEITI published a policy brief titled “the 1993 PSCs: the Steep Cost of Inaction,” which revealed that Nigeria lost between $16.0 billion and $28.61 billion within 10 years for failure to review the terms of PSC agreement, in 2008 as was required by the law governing the PSCs.

Experts across the continent, however, say that if the resources in Africa are to be used effectively and harnessed for development, more accountable and transparent mechanisms must be developed and supported by governments, multinational corporations, legislative bodies, political parties, civic organisations and the media. Governments must also give full support to the local companies.

Experts’ views

The Regional Director, Amnesty International’s Southern Africa Regional Office (SARC) based in Johannesburg, Deprose Muchena, urged journalists across the continent to beam their searchlights at the fantastic indicators in capital and financial markets along with the rising power of the extractive industries.

He said the continent is rich in natural resources, but poor in human development because its growth strategies are pure commodities. “But the problem in Africa is that there is no strategy to direct the process for economic growth into human development.

“So, there is a contrast that sits with countries very rich in natural resources but very poor in human development. So, for these three cousin countries, they have the tendency to induce the capacity of poor people to respond to growth.

“Until our governments take specific policy measures to direct the proceeds of growth from expatriate to human development, then we will not be able to move forward. Our product leaves our soil and goes to China and turns in like seven bye products and then produce jobs for them.

“Meanwhile, local companies are dying every day, while the presidents of their countries are travelling to foreign countries to seal deals and contracts. This means the future of African countries is heading to the doldrums,” he said.

Muchena said the way forward is for “Our governments to link and connect the dot between what is happening in our extractive industries and the very weak manufacturing base. We will continue talking about how rich our continent is, but populated by very poor people. Also, regulation by the governments is important.”

Investment Analyst and Columnist with Barclay’s Africa Stockbroker and Portfolio Management, Chris Gilmour, added that to make any change happen in Africa, there is need for a huge commitment to make manufacturing and extractive industry function in a better and more transparent way.

He said African leaders are not ready to provide solution to the problems that have kept the people in poverty. “African leaders understand the problem but they are not ready to provide the solution.

“For instance, Nigeria has businessman, investor, and owner of the Dangote Group, who has interests in commodities in Nigeria and other African countries. If you ask what that one challenge to his business is, he will identify bureaucracy and red tapism and this is true,” he said.

Economic Editor at the SABC, Ms. Thandeka Gqubule-Mbeki, on her part, said the reluctance by African leaders to implement policies that can reduce unemployment and poverty rate on the continent is what may soon lead us to the doldrums.

“There are policies that could be used to alleviate the pain of the ordinary man on the street and their reluctance to do so indicate primarily the desire to run the economy in the interest of the financial services sector shows failure on their part.

“The cost of capital is too high and this has made the manufacturing companies throughout the economies to be reluctant to borrow, reluctant to expand their production and also reluctant to employ.

“Consequently, the interest rate has not been good and the level of unemployment has concomitantly risen”, she added.

 

Beset by frequent drought, unpredictable rainfall, degraded soils, pests, disease and conflict attributed to climate change, African farmers are struggling to engage in steady supply of crops and livestock for consumption and sale. This has prompted increased advocacy for the implementation of climate-smart agriculture (CSA) to meet the growing demand for food for Nigeria and the rest of Africa’s increasing population. More than $100 billion is available from the World Bank and other donors to fund climate smart agriculture in Nigeria and the rest of Africa. To take advantage of funding, African Ministers of Agriculture are seeking ways to improve financing for climate smart agriculture, DANIEL ESSIET writes.

In Africa, more than 70 per cent of the people who work in the agricultural sector are smallholders. This makes agriculture the most important sector of activity.
As such, agriculture is a fundamental instrument for sustainable development of sub-Saharan African countries to sustain local livelihoods and ecosystems. This notwithstanding, from Nigeria to Zimbabwe, farmers struggle to produce a steady supply of crops and livestock for consumption and sale following increased challenges to achieving food security. One of them is global warming that has caused extreme weather events including heat waves, droughts and floods, which are currently more frequent and more intense.
In some countries such as Mali and Ethiopia, climatic reality including poor or erratic rainfall, long dry spells and floods, has led to reduced incomes of households, worsening food insecurity, nutrition and employment. As a result, growing seasons and agro-ecological zones are shifting more and more.
The challenges are major concerns. More of this is expected in the coming years as climate change impact on people in sub-Saharan Africa. According to experts, if left unchecked, the situation will reduce the availability, access, and utilisation of safe and nutritious food.
Such risks, experts said, make agriculture unattractive for investors who struggle to unlock financing to support agribusinesses.
Climate change challenges
The devastating effects of climate change from longer periods of drought to increased frequency, duration and intensity of tropical storms, are being felt around Africa with an intensity that underscores the immediate need for concerted efforts.
Barring action on a sweeping scale, climate change will accelerate the danger of severe food shortages. As a warming atmosphere intensifies Africa’s droughts, flooding, heat waves, wildfires and other weather patterns, it is speeding up the rate of soil loss and land degradation.
CSA to rescue
Climate Smart Agriculture (CSA) is an initiative that aims to enhance the capacity of the agricultural systems to support food security, incorporating the need for adaptation and the potential for mitigation into sustainable agriculture development strategies. It proposes more integrated approaches to the closely linked challenges of food security, development and climate change adaptation/mitigation, to enable countries to identify options with maximum benefits and those where trade-offs need management.
To this end, the Adaptation of African Agriculture to climate change (AAA) Initiative gathered Ministers and representatives of African governments, key financial and technical institutions, donors, private sector, universities and scientists at the Mohammed VI Polytechnic University of Benguerir, Morocco to seek ways to improve financing for climate smart agriculture.
The event organised under the theme: “Food Security Facing Climate Change”, brought together representatives of key financial institutions, donors, the private sector and scientific researchers to discuss ways of adapting African agriculture to climate change. It was organised by the AAA in partnerships with Mohammed VI Polytechnic University and OCP Group.
AAA so far boasts of the support and contribution of 35 African countries, more than half of the continent’s 54 states. The AAA Initiative aims to provide an innovative and concrete response to the challenges raised by climate change in Africa by mobilising international knowledge and intellectual and financial resources. The first day of the conference was devoted to the Scientific Day, during which leading international experts and scientists discussed Africa’s food security challenges related to climate change, while the Donors Roundtable discussed ways to mobilise funds.
Speaking during the event, the Minister of Agriculture and Rural Development, Mohammed Sabo Nanono, said Nigeria was taking steps to address the impact of climate change on production in the face of increasing demand for healthy and nutritious food. In line with this, the Federal Ministry of Agriculture and Rural Development (FMARD) has implemented Agriculture Climate Smart Agriculture Investment Profile (CSAIP). The key highlights of the profile include a number of mitigation measures such as improved soils and nutrient management, use of alternative domestic fuel in rural areas, and creating fixed grazing systems or dedicated pastures, among others.
These activities, he continued, have promoted CSA as a feasible and comprehensive approach to ensure agricultural productivity, adapt to climate change and achieve mitigation targets. Added to this, he said, the Federal Government is promoting research, technology and policy approach to agriculture adapting to climate change, practices and sharing experiences. This, according to him, would contribute to successful implementation of the scheme on greenhouse emission.
Notwithstanding Nigeria’s efforts to promote adaptation of agriculture, the minister stressed that there was the need for regional and international collaborations and partnerships. He said: “Nigeria is interested in Lake Chad Basin development, agro-allied industry development and trade in partnership with her neighbouring countries. This would not only enhance sustainability but also improve living standards of the people which are important for resilience, peace and security.”
He reiterated that Nigeria would continue to support the activities and programmes of the AAA initiative with respect to ensuring food security in the face of the climate change. “Our commitment to this initiative is informed by Africa’s increasing population and high unemployment which must be addressed through regional and international collaboration.”
The minister said the adoption of CSA in Africa will improve the productivity and quality of agriculture, increase farmers’ incomes and reduce their vulnerability to adverse climatic phenomena.

Why climate-smart agriculture?
More than 200 key players from the public and private sectors gathered at the second annual ministerial conference of AAA initiative to tackle food insecurity and climate change in Africa.
In his opening speech, Morocco’s Minister of Agriculture, Fisheries, Rural Development, Water and Forests and President AAA Initiative Foundation, Aziz Akhannouch, said in Africa, global warming is happening faster and the consequences include land degradation and desertification.
The challenge, according to him, is to build the resilience of vulnerable communities and deliver timely assistance when they need support. He called on African leaders to prepare for climate change. He said climate smart agriculture must be integrated into key planning processes so it can receive financial support.
AAA Foundation Secretary General, Seyni Alfa Nafo, said the continent faces a number of challenges related to the conceptual understanding, practice, policy environment and financing of CSA. He said the initiative was designed to help link climate financing with food security through priority projects, allowing for better appreciation of Africa’s natural resources in a sustainable manner.
According to him, the initiative promotes the implementation of tangible projects on soil management, agricultural water management, and climate risk management.
Former Ethiopian Prime Minister, Hailemariam Desalegn, said climate change is one of the greatest threats to agriculture and by extension one of the greatest threats to African economies. According to him, the World Bank also reports that 75 per cent of the world’s poor are rural, with most involved in agriculture.
Consequently, agricultural performance is fundamental in poverty reduction, food security and economic growth contributors such as employment. The dependence of the important sector on specific climate conditions, he continued, renders it a climate vulnerable sector. He added that climate-smart agriculture is seen as the solution to transforming agriculture by adopting farming practices and techniques that address the threats of climate change and make agriculture more resilient to it.
He called on African leaders to promote climate-smart agricultural initiatives to combat the effects of climate change that affect agricultural productivity.
Egypt’s Minister of Agriculture and Land Reclamation, Dr. Abdel Moneim El-Banna, said the agricultural sector is facing a number of challenges such as the impacts of climate change, water and land scarcity, high levels of urbanisation and an increasing demand for healthy and nutritious food. He said the constraints placed on Egypt’s land and water resources by changing climate forced the government to look at solutions to make the country’s agricultural sector rigorously efficient.
He added that the Egyptian leadership adopted the 2030 Sustainable Agricultural Development Strategy, incorporating Egypt’s 2030 vision to achieve a competitive, balanced, and diversified economy, social justice, and improved livelihoods for the Egyptian people.
The Director-General, AAA, Mrs Abir Lemseffer, said the conference was organised to help further drive the momentum of increasing engagement in tackling the climate challenge. The initiative, according to her, also seeks to restore African ecosystem balance and enable countries of the continent to have access to climate funds.
She said conference aims to support sustained efforts to ensure food security in Africa against a backdrop of accelerating climate change by mobilising international financial resources. She said AAA has been based on a solid scientific platform with several centres globally which are all contributing and each time they are working with a country.
She said they have experts from all over the world, adding that they try to find the techniques within each country which best suits its climate change challenges. She said the initiative is engaging the funders/investors to find innovative ways/innovative project re-engineering. AAA, she noted, is working in seven countries. She said the initiative have concluded work in Mali and Cote d’Ivoire where they have built a climate investment plan which they can present for financing.
In addition, she said the initiative is working with Congo, Cameroun, Ghana and Burkina Faso governments to build capacity building on agriculture techniques. These involved structuring a strategy, using the right terminologies and how to do presentations.
The Commissioner, Department for Agriculture and Rural Economy, African Union, Hon. Josefa Leonel Correia Sacko, said the continent’s agriculture is vulnerable to climate change. She noted that the region suffers from recurring risks to food production and without adequate measures to adapt.
Under a changing climate, she said the risk to food security in Africa would be extremely severe, with limited potential for reducing risk through adaptation. She said AU is mobilising the continent’s leaders on the need for climate action to become a high priority in the development agenda of all African States.
The Chief Executive, OCP Africa, Karim Senhadji, said Africa’s key option for achieving food security, poverty reduction, employment creation, and overall socioeconomic development lies in the transformation and improvement of its agricultural sector. For smallholder farmers to remain in agriculture, he said interventions requiring climate-smart water management technologies and practices need to be put in place at various spatial scales.
According to him, OCP is working on analysing local soils and providing local farmers with fertiliser and agricultural products adapted to each type of soil. He said OCP hopes to promote an agriculture that is more productive, but also takes into account ecological diversities.
The Côte d’Ivoire Minister of Agriculture, Mr. Mamadou Sangafowa Coulibaly, said his country is implementing adaptation measures to address the vulnerability of rural households’ dependence on agriculture and livestock as a source of livelihood.

Challenges
In many African countries, the Lesotho Minister of Agriculture and Food Security, Dr. Mphu Ramatlapeng, said there were no long-term climatic and landscape level data. As a result, decision makers lack knowledge of current and future projected effects of climate change and the implications for agricultural practices, food security and natural resource management.
Ramatlapeng said lack of information, limited human and institutional capacity as well as lack of research-based evidence, impedes the ability of decision makers to implement adequate financing plans for CSA.
Nafo said while there is high-level support for CSA, adoption remains low, largely due to lack of knowledge on practices and economic costs among other barriers. According to him, AAI is working on guides to provide the much needed evidence for guiding investors interested in CSA. The initiative, he continued, would help ensure climate-friendly food security, through provision of technical assistance.

Attracting business to CSA
More than $100 billion is available from the World Bank and other donors to fund climate smart agriculture in Nigeria and the rest of Africa.
The Morocco Minister of Agriculture stressed the need to reduce risks for the investors. He said agriculture is a risky business due to dangers such as uncertain weather and poor rural infrastructure.
He noted that de-risking is critical for unlocking agricultural finance by allowing investors, project developers and governments to reduce the possibilities of negative or unsatisfactory outcomes.
By using science to guide investment decisions in climate-smart agriculture, he said ministers can de-risk farming to help promote the much-needed investment in African agriculture. Nafo said the initiative has conducted a series of analyses of investment barriers and possible policy intervention to increase the investment attractiveness of CSA.

Green bond, adaptation funds
Since 2010, the Adaptation Fund Board has committed about $720 million for climate change adaptation and resilience projects and programmes, including 100 concrete localised adaptation projects in the most vulnerable communities of developing countries around the world with more than six million direct beneficiaries. It also pioneered direct access, empowering countries to access funding and develop projects directly through accredited national implementing entities.
The World Bank has raised more than $13 billion through almost 150 green bonds in 20 currencies for institutional and retail investors all over the globe. At the end of the fiscal year 2018, there were 91 eligible projects and a total of$15.4 billion in commitments. Of these commitments, $8.5 billion in Green Bond proceeds were allocated and disbursed to support projects in 28 countries and another $6.8 billion had yet to be disbursed.
Together, these sectors made up approximately 69 percent of the Green Bond commitments. World Bank alone issues $50 billion every year in Sustainable Development Bonds for its development lending.
The World Bank Group (WBG) is currently scaling up climate-smart agriculture. In its Climate Change Action Plan, the World Bank committed to working with countries to deliver climate-smart agriculture that achieves the triple win of increased productivity, enhanced resilience, and reduced emissions.
World Bank Country Director for Morocco, Jesko Hentschel, said WBG has initiated several projects to identify opportunities to improve climate finance to support agriculture and smallholder farmers. He said there were case studies to identify emerging opportunities from the Nationally Determined Contributions (NDCs) and other policies and frameworks that could support climatic actions and finance for agriculture.
Looking at the large number of recent reports from the IPCC, and in particular the Global Commission on Adaptation (GCA), Hentschel observed that the global community is finally beginning to pay due attention. He said: “AAA and the Moroccan government had already seen this when they hosted the ‘adaptation’ COP22 in Marrakech, and the mandate of AAA has never been more critical.”
He noted, however, that climate-smart investments into agriculture continue to fall well short of the financing gap estimated at $210 billion per year globally. “We are currently working with AAA on the roll out of the Climate-Smart Agriculture Investment Plan (CSAIPs) series and to date with 11 countries across Africa.
“If we take currently ongoing investments and those in our pipeline together, we are very proud to share with you that we are financing over $2 billion in projects across Africa that are in support of AAA objectives as described in the priority investments identified or being identified under CSAIPs, “ Hentschel said.
The World Bank expressed its readiness to accompany the efforts by investing $2 billion in smart-agriculture in 11 of the AAA countries across Africa.
The Director, Division of Country Programming, Green Climate Fund, Pa Ousman Jarju, said climate-smart agriculture is more than adaptation and mitigation. He said it was also about increasing the efficiency of resources and adapting new technologies to eradicate food insecurity and poverty among farmers.
The Executive Director, Wholesale Banking, Bank of Agriculture, Olabode Abikoye, said the bank is deploying different products to meet farmers’ challenges. According to him, productive, efficient agriculture is a strong foundation for economic development but the sector faces an unpredictable future due to climate change.
Abikoye said the bank was partnering OCP Africa to give farmers new technologies with the potential to transform agricultural production.

AAA initiative
AAA is an initiative for Africa and Africans from Africa. It was launched during the United Nations’ COP22 held in Marrakesh, Morocco in November 2016. It was adopted by the African Union as being the voice of the adaptation of the African agriculture.
In the Marrakesh Declaration, participants unanimously declared their commitment to support the AAA initiative to help African agriculture adapt to climate change. Several milestones have been successfully reached to give more vissibility to the AAA Initiative, to help African countries to implement their nationally determined contributions (NDC) and to strengthen the capacity building of African policy makers and project holders.
Since January 2019, the AAA initiative is held by a foundation, under the impetus of His Majesty the King Mohammed VI, with the mandate of implementing the objectives of the AAA Initiative and also of providing assistance, advice, capacity building and technical support to decision makers, local institutions, project holders and farmers in Africa. Since then, the Foundation has sought to contribute to food security, improve the living conditions of vulnerable farmers and promote employment in rural areas by encouraging climate change adaptation practices and channeling financial flows towards the most vulnerable farmers.
As a key driver of growth in Africa, Chief Executive Officer, African Private Equity and Venture Capital Association, Michelle Kathryn Essomé, said the continent’s private equity ecosystem has a tremendous opportunity to contribute to the achievement of the Paris Agreement and be a leader in the global fight against climate change. According to her, sectors such as renewable energy, climate-smart agriculture or climate-resilient infrastructure all constitute highly attractive opportunities in Africa.
She said the $850 million recently raised by emerging markets renewables investor – Climate Fund Managers – above and beyond an initial target of $530 million – is a testament to the attention climate-smart investors are attracting.

She said institutional investors are increasingly asking fund managers to pay close attention to climate change at all stages of decision-making, from the investment process through to operations and management.
She added that there is a growing global momentum for monitoring, reporting and disclosure of climate-related risks and opportunities, with over 500 organisations having signed up to the Task Force on Climate-related Financial Disclosures’ recommendations.
From 2020, she continued that the 2,300 members of the UN’s Principles for Responsible Investment – who collectively represent some $80 trillion in assets – will incorporate two key indicators from the task force into their reporting frameworks.

By Adeyinka Aderibigbe

The Lagos Area Office of National Inland Waterways Authority (NIWA), on Friday, gave dredgers till January 31, to obtain their permits or leave the dredging business.

NIWA Lagos Area Manager Saraat Braimah made this known while speaking with stakeholders at the BCIS Garden, Lekki Phase 1, Lagos.

She said any operator, who did not have dredging permit, would not be allowed to dredge.

She said community development should be one of the primary concern of dredgers but the case was the reverse as Obas and Chiefs in the dredging communities did not know those dredging in their areas.That is why we want to monitor the dredging hence, we are advising everyone to join the dredging association because we want to know those we are dealing with, she said.

Braimah urged dredging companies to stop causing wrecks and the indiscriminate laying of pipes which block navigation ways. She also asked them to key into Corporate Social Responsibility (CSR) to help the communities to promote greater understanding.

She disclosed that NIWA had approved the take-off of barge transportation but expressed worries that a new phenomenon – waterway transportation complaints – had started trailing NIWA with complaints of containers falling off the waters.

She said the barge service was introduced to reduce traffic in Lagos, adding that NIWA was going to give permit to those fit for barge operations.

Braimah, while addressing the stakeholders said NIWA was organising a three-day training for boat captains and crew from December 6, at Sea School. She urged everyone who has a water craft or operates in the sector to partake in the training as lecturers would be drawn from across Nigeria, and that the certificates to be issued after the training would be used to register boats from next year.

Braimah mandated dredgers to have water sediment pot where waters would be channeled it would not spill into communities. She restated the ban on night travels on the waterways.

Read Also: Inland waterways can ease pressure on Nigerian roads, says Moghalu

She addressed the issue of insurance by boat operators, adding that NIWA will no longer take it lightly with any boat operator who fails to insure his boats or water crafts.

Some of the traditional rulers at the meeting said they expected the dredgers to know what was right and to do it as doing otherwise may be injurious to the community, and the government would always hold Obas responsible if anything happened in their domain.

They observed that it was wrong and dangerous for a dredging company to operate 30 metres close to a house, demanding that NIWA should be play a more active role as the mediator between dredgers and the communities.

The past President of Dredgers Association of Nigeria, Mr. Yomi Idowu, an engineer, who represented the President of the Association, said NIWA should consider the economic downturn and reduce dredgers’ charges, arguing that this will increase its revenue as more people will be attracted to the business.

The President, National Association of Tourist Boat and Water Transportation of Nigeria (ATBOWATON), Mr. Gani Tarzan, said NIWA, dredgers and every other person operating on the waterways were brothers, and for that reason, “all we are saying is there should be an enabling environment for us to operate by regulators.”

He said what we do today is what will speak for us tomorrow. He asked NIWA to introduce a huge waste bin on the waterways, put signage on our waterways. It should not be permit, all the time because there is no way the Federal Government can work without the state or the local governments without the communities.

 

 

Mixed reactions have greeted the return of toll gates in the country. Former President Olusegun Obasanjo had, during his term, demolished the toll gates because the facilities were not only generating negligible revenue but also because the venture had metamorphosed into a cesspit of corruption. OKWY IROEGBU- CHIKEZIE reports on the planned return of tolls in the country.

The decision to scrap toll plazas was taken by former President Olusegun Obasanjo in 2003.

He had argued, among others, that the tolls were conduit for some individuals to line their pockets.

This has brought about mixed reactions of stakeholders to the proposal to return them.

Those opposed to the return of toll want to know if the reasons advanced for their abolishment had been dealt with.  They say the government could explore Public-Private-Partnership (PPP) option and give incentives such as tax breaks to private investors to the project.

Almost 80 per cent of Nigeria’s road network can be considered worn out; some are death traps, full of potholes, cracks and creeks along the edges. The reason for this is not just a lack of government investment in road infrastructure; it is also that the scale of the investment needed far exceeds anything government alone can shoulder at this point in time. There is also the important element of mismanagement and misappropriation of funds earmarked for roadwork happening routinely across the federation.

Stakeholders speak

An estate surveyor & valuer and former National Secretary, Nigeria Institution of Estate Surveyors & Valuers (NIESV), Sam Ukpong said he would support tolling, if the government can make them development and growth centres. He said ideally, it should be used to develop communities along the high ways by the provision of infrastructure that can grow and develop them such as hospitals, schools, hotels and markets.

Ukpong advised that the tolls should be sited in places that will attract development to the people where they can carry out their businesses. He lamented that rips which should take few hours have become needlessly long, adding that with the decline in security across the country, thevroads have become potentially dangerous.

He regretted that all the tolls on the nation highway before now were badly managed and placed into the wrong hands. Ukpong said nothing showed that the former tolling was deployed into meaningful endeavour by the government as the highways remained death traps as they were abandoned and left in a state of disrepair.

He advised the government to learn from best practices overseas where people are encouraged to drive in and park and refresh while driving on a long journey. The NIESV chief said hotels, hospitals and supermarkets should be part of the new toll gates.

Like it is done in advanced countries people pay tolls and are afforded the opportunity  of driving in well maintained highways with all the road infrastructure benefits he added.

He said: “That roads are important to the development of any economy is given. With functional roads, farmers who have tilled the ground, planted crops and harvested them for consumption are able to move their produce from their farms to the markets. Similarly, people move to places offering services and satisfying demands of the society through roads. Without functional roads, these basic human endeavours which in many ways guarantee prosperity are lost”.

A highway engineer, and Managing Director, Ethical Business and Management Associates, Afolabi O. Adedeji, said Nigerians might not be too receptive to the facts involved in justifying the re-introduction of tolls on federal roads at this in time when the citizens are in the throes of economic recession.  He said though the previous experience was charecterised by corruption, tolling might provide the answers needed to maintain the nation’s highways.

He explained that some of the benefits were revenue collection that would be applied towards recovery of road construction costs, road maintenance and future road development. Others,  he added, were  round-the – clock presence of  security operatives at the toll gates  to enhance safety  on the highways to deter robbers, marauders, kidnappers, and other criminal elements.

He said: “It would be needful to have speed limiting and speed control at the approach to toll collection plazas, which have the capacity to reduce accidents caused by excessive speeding. The Federal Road Safety Corps (FRSC) has been raising discussions about the possibility of undertaking random tests on commercial vehicle drivers for the level of slcohol in their breath (there are established safe limits for this), random eye tests (to ascertain visual acuity), random blood sugar tests (to determine uncontrolled blood sugar level that may lead to diabetic coma whilet driving, and possible fatalities) and others. With proper coordination, this seemingly esoteric aspect of the constitutional role of the FRSC may be enhanced by the reintroduction of toll plazas.”

Afolabi said the toll would encourage  further financial inclusion and ‘deepening’ of financial services among Nigerians who might be encouraged to use electronic products as well as electronic channels of various banks for paying their tolls, with an attached ‘price’ of faster passage through the toll gates. This idea was also mooted on the Lekki-Epe Expressway that was concessioned to the Lekki Concession Company (LCC).

He said tolling in absolute terms for the poor is double jeopardy, as the cost of daily  transportation in cities and within towns are all embedded on  the current illegal toll plazas,  numerous police checkpoints on inner city roads and the highways.

He said: “The average commercial driver in this country already pays through the nose at the police toll plazas, in multiple numbers, throughout their journey.  It must be known that they are not out to detect or deter crime, but merely to extort money from hapless motorists.”

Nigerian Society of Engineers (NSE) President Kunle Mokuolu said while tolling appears to be a good option because roads need funds, a permanent solution would be engaging the private sector with the government acting as the regulator. According to him, it is better for the government to regulate the private sector than regulate itself.

He called for the use of technology if government insists on tolling, adding that this would enhance smooth operations since the number of vehicles has doubled.

Labour reacts

The Organised Labour has, however, rejected the proposed plan by the Federal Government to re-introduce toll gates on federal highways.

While the Nigeria Labour Congress (NLC) said the toll gates would worsen people’s misery and raise the poverty level in the country, the United Labour Congress (ULC) said the only condition for Nigerians to accept a return of toll gates on federal roads is a drastic reduction in pump prices of petroleum products.

It contended that the money to be realised from toll gates was factored into pump prices of fuel before they were dismantled in 2003.

NLC General Secretary, Emmanuel Ugboaja, said: “It is not a welcome news at this point in time. It is going to put extra pressure on the ordinary people and worsen the poverty level in the country because it will affect the prices of goods and services. The roads are in very bad shape across the country, how can you toll a bad road? If you have fixed the roads and you now talk of tolling to recoup the money spent and to generate money to maintain the roads, people could consider it. But now, it is unacceptable because roads have remained the only means for transportation for humans, goods and services because the rails are not working. It is desperation by government to raise money at all cost.”

NLC urged the government to fix the dilapidated roads first before bringing back tolling, arguing that “if people could travel from Lagos to Port Harcourt in less than seven hours, travel from Lagos to Benin City in three hours on road, or from Abuja to Lagos, to Port Harcourt in less than seven hours on a smooth road, people will listen when tolling issue is raised. But today, the roads are in terrible conditions. It is unacceptable because it will bring nothing but more misery to the ordinary man”.

The Nigeria Employers’ Consultative Association (NECA)  has also advised the Federal Government to put in place an efficient policy before returning toll gates on federal roads.

Its Director-General, Mr Timothy Olawale, urged the government to engage relevant professional and business organisations to fashion out policies that would guide its operations for effective infrastructure development of the nation.

“We are conscious of the numerous benefits that the economy can derive from tolling. However, we are concerned about the past failures which characterised the management of the toll system across the nation, which were marred by revenue leakages and unmet maintenance of the tolled roads. “We will like to reiterate that not all roads are viable for tolling, especially subsidiary roads and roads with low traffic volumes,” he said.

Olawale also said the government should not place additional burden, in form of any tax or levy on businesses or individuals in order to fund the construction of the toll gates.

According to him, businesses and individuals have already been inundated with numerous taxes and proposed additional taxes, including the mobile phone tax, and increase in Value Added Tax (VAT).

He said: “All these and many more will reduce the purchasing power of consumers with dire consequences for businesses. Private sector operators should be attracted through PPPs in the construction, maintenance and management of the toll systems, as it is done successfully in other climes, such as Egypt and South Africa.”

Olawale also called for the resuscitation of the rail system, as it remained the cheapest and most efficient of all modes of transportation globally.

He said the rail system would reduce the high cost of maintenance as it carried more than 90 per cent of domestic freight and passengers.

Experience from other climes

Use of tolling to help pay for expressways is being increasingly adopted in countries whose highway capital and operating expenditure requirements outstrip public resources to pay for them. Countries as diverse as Australia, Brazil, France, Germany (goods vehicles) India, Italy, Japan, Mexico, Switzerland and others have widely adopted road tolling (through various means). Even in the United States (U.S), more than 4,000kilometers of the inter-state highway system are tolled.

China, a global leader in building modern, high-standard road network use it to promote economic development, regional integration and social cohesion. Road transport forms a vital and fast growing sector of the transport sector, supporting trade and growth through the movement of goods and people, allowing economic specialisation, spreading skills and enhancing productivity.  The government of China’s position  is that roads improve regional connectivity and help spread the benefits of China’s economic development to its inland areas, including the reduction of rural isolation and improvement of  citizens’ access to jobs, health facilities, education and social services.

However, some voices in China have been raised against either the principle of road tolls, or their practical application, or both. Common arguments are: that roads constitute essential social infrastructure and should be provided free to users; that no other country has so many tolled-roads; that as soon as the loans for construction have been repaid tolls are no longer justified.

One of the few examples of such roads in East Africa is under construction in Uganda. The multi-million 50-km Entebbe Highway is being funded and constructed by China’s Export-Import Bank under a public-private partnership for highway transportation management.

Other private companies involved in the construction of these roads are obliged to construct and maintain them at the highest possible standards based on long-term concession agreements or leases lasting decades.

Investors recoup their investment through toll collection during the life of agreement before transferring the highway roads to the government authorities. This method is referred to as Build, Operate and Transfer (BOT).

In Ghana, for instance, there are 29 toll stations and 1.1 million vehicles. Ghanaians say they expect visible and tangible improvements on the roads with  better lighting, improved pavements and good management of the road unlike here where some school of thought do not want to entertain anything on tolling citing mismanagement and corruption in  the past.

Several  countries in Europe  rely heavily on private roads, concessions, or private-public partnerships as means of funding some of their road infrastructure. In Australia for example, some of its state governments have developed networks of toll roads in partnership with private-sector investors. Some of them have tolling systems to obtain part of their revenue for financing roads.

And, in the case of Japan and France, they have linked their tolls with the weight of the vehicle and distance travelled. Similarly, in the Netherlands, tolls known as ‘mobility rates’ are collected for the use of roads as cars enter fee-payment gateways. Even in England, a congestion tax is imposed on vehicles that enter central London during certain hours, just as it is done in the cities of Stockholm and Gothenburg.

While this tax is not specifically used for road maintenance, it is however purposed to shift the preferred means of transportation from cars to public transportation, and to pay for the environmental effects of motor vehicle use on the roads, thus preserving them from deteriorating quickly.