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African Governments Should Explore Natural Capital to Finance SDGs – AfDB

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Africa must use all its comparative advantages to mobilise the resources it needs to finance its sustainable development ambitions.

The African Development Bank (AfDB) Group made the call in a statement on its website on Tuesday.

The statement reported the Organisation for Economic Co-operation and Development (OECD) as saying that since 2010, Africa’s official development assistance declined to its lowest level of 34 billion dollars in 2022.

It said the continent’s access to international capital markets remained constrained and costly due to investors’ perceptions of high risk.

However, it said the continent was not short of options as it could draw immense potential of natural capital, including fresh water, forests and extensive mineral deposits to attract investment and accelerate economic growth.

“This is what the Annual Meetings of the AfDB scheduled to take place from May 22 to 26 in Sharm El Sheikh, Egypt, intend to demonstrate,’’ it stated.

According to the statement, about 30per cent of global mineral reserves is in Africa, including 60per cent of world cobalt reserves and 90per cent of platinum-group metals.

It further said the continent contributed substantially to the world’s annual production of six key minerals.

“This includes 80 per cent of platinum, 77 per cent of cobalt, 51 per cent of manganese, 46 per cent of diamonds, 39 per cent of chromium and 22 per cent of gold.

“Africa holds seven per cent of the world’s natural gas and oil reserves, has more than 60 per cent of undeveloped arable land, and is home to 13 per cent of the world’s population.

“Sixty per cent of its people are under 25 years of age, the youngest population in the world.

“About 75 per cent of African countries have maritime access, offering significant opportunities in the blue economy, which has a global potential of an estimated 1.5 trillion dollars if sustainably managed,’’ it said.

The statement said hundreds of internationally listed junior mining companies over the years had mobilised considerable capital by promoting the value of their exploration or extraction licenses for African deposits on markets.

According to the statement, governments have often failed to harness this natural potential to mobilise resources.

It further explained that hundreds of millions of people exploited natural capital in an ad hoc manner; for instance, in the charcoal industry, which relied on an economic model of deforestation.

However, it said some countries were effectively taking advantage of natural capital. Morocco, for example, had established huge solar and wind energy plants.

“ In 2022, British renewable energy company Xlinks announced the construction of a 3800-kilometre submarine cable to allow the UK to take advantage of this energy.

“Egypt harnesses the Nile River and the Suez Canal in various ways.

“The country also has the Benban solar photovoltaic power plant, inaugurated in 2018, contributing to increasing the renewable energy output to 42 per cent of the total by 2035.

“Benban is expected to reduce carbon dioxide emissions by two million tonnes annually.

“When running at full capacity, it will generate 3.8 terawatt-hours of electricity per year, equivalent to 90 per cent of the electricity produced by Aswan High Dam,’’ it said.

The statement said AfDB’s annual meetings would feature discussions of how Africa’s natural capital could be an important financing vehicle for the continent’s climate change adaptation.

It would also feature mitigation actions, Africa’s green growth ambitions, and its private sector investment.

It said the discussions would feature climate change and natural capital experts, African ministers, and Bank governors.

“In addition to discussions about local content and value addition, the dialogue will also focus on trade and regional integration, infrastructure, finance and investment policies; human capital and skills development; and technology upgrading.

“In September 2021, AfDB inaugurated a new initiative to integrate natural capital into development financing in Africa.

“The meetings in Sharm El Sheikh thus provide an opportunity to review this project and its first achievements.

“The meeting also provides a platform for the host country, Egypt, to share its successes in tapping its maritime and freshwater assets,’’ the statement said. (NAN)

Business News

Nigeria Spends $600m Annually on Palm Oil Importation

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The National Palm Produce Association of Nigeria (NPPAN), says Nigeria spends 600 million dollars on palm oil importation annually.

Mr Alphonsus Inyang, National President of the association stated this in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.

He  described the expenses as unhealthy for national development.

Inyang said the samount could be saved and injected into the economy if the palm oil sub-sector was given due attention by successive governments.

The president said that Nigeria  which was self sufficient in palm oil production in time past,  now spends  huge amount to import same product.

Inyang said in the 60s, Nigeria was number one in palm oil  production and exportation globally, controlling over 60 per cent of world palm oil.

He said that the reverse was the case at the moment as over 50 per cent of what “we consume are imported,”he said.

Inyang said at the moment the country occupies fifth position in the league of palm oil  producing countries after Indonesia, Malaysia,Thailand and Colombia.

According to him, Nigeria may lose the position to smaller countries who are investing heavily in the sector.

He said  Indonesia occupies the first position,  producing 50 million metric tons, Malaysia second with 19 million metric tons, Thailand 3.28 million and Colombia 1.9 million metric tons.

The president attributed the challenge to the negelect of the sector by successive governments.

Inyang said based on the U.S.  Department of Agriculture, Nigeria currently occupy fifth position in the league of palm oil producing countries with 1.5 per cent or 1.4 million metric tons of the world’s total output.

“Nigeria was overthrown as the world’s largest palm oil producer and exporter by Malaysia and Indonesia in 1966.

“Currently Nigeria is the largest consumer of the product in the continent, consuming approximately three million metric tons yearly.

“Domestic production stands at less than 1.4 million metric tons, leaving a deficit of over 1.6 million metric tones,’’ he said.

Inyang urged government, specifically the Federal Ministry of Agriculture and Food Security to support NPPAN members  with seedlings to develop 250,000 hectares per year.

“Our members can plant up to 250,000 hectares per year through the association’s National Oil Palm Strategy Development Plan , all we want are inputs.

“Government does not need to give and develop land for us, we need seedlings, fertilisers, logistics and implements to close this gab within four years.

“We will also create new millionaires in 28 states of the federation, “he said. (NAN)

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Economy

Nigerian Banking System is Stable, CIBN Assures Nigerians

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The Chartered Institute of Bankers of Nigeria (CIBN) on Wednesday reassured Nigerians that the banking system remained “safe, sound and resilient,” dispelling fears of bank liquidations.

Its president, Prof. Pius Olanrewaju, gave the reassurance in a statement in Lagos to correct misinformation and fake news that licence of more banks would be revoked.

Olanrewaju emphasised the importance of clarifying rumours that additional bank licenses would be revoked, following the regulatory action taken by the Central Bank of Nigeria (CBN) against Heritage Bank Plc on June 3.

“We would like to allay the fears of bank customers and the general public that the assertion is false and misleading.

“The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) have debunked the claim,” the Chairman of Council, CIBN, stated.

He added that the ongoing recapitalisation process announced by the CBN aims to further strengthen the resilience of banks and their capacity to support the growth of the Nigerian economy.

“Consequently, we urge the public to continue conducting their banking services without hesitation or apprehension,” Olanrewaju said.

According to him, CIBN is committed to promoting best practices and ensuring that the sector remains safe and sound, in collaboration with other stakeholders in the ecosystem. (NAN)

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Business News

FG Secures Investment Commitments of over $30bn Across Sectors-Minister

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The Federal Government  has secured investment commitments of more than 30 billion dollars across different sectors of the economy.

Dr Doris Anite, the Minister, Industry, Trade, and Investment (FMITI), said this during her presentation at the Ministerial Sectoral News Conference to mark President Bola Tinubu’s first year in office  on Tuesday in Abuja.

The News Agency of Nigeria (NAN) reports that her presentation was titled “Unlocking Trade and Investment to Achieve Renewed Hope Agenda “- Key Achievements and Contributions of the ministry.

Anite said Nigeria’s investment landscape was now witnessing a significant influx of foreign capital, aligning with the Renewed Hope agenda  Tinubu.

She said in addition, the ministry was taking decisive and structured steps to attract capital investments, which would transform the nation’s homegrown enterprises and industries into global players.

“We have concluded stakeholders’ engagements with our domestic private equity and asset management firms towards the inauguration of an Investment Mobilisation Initiative aimed at increasing local and foreign investment as a catalyst for economic growth.”

The minister said in a bid to boost private equity capital formation, the Nigeria diaspora fund was initiated.

“The Nigeria diaspora remit between 20 to 25 billion dollars annually according to the World Bank, but these remittances have not been channeled intentionally to private equity.

“ Therefore, the investment initiative by my ministry is creating the platform to target, mobilise and utilise some of these funds into the productive economy.

“Our Private Equity and Asset Management firms are adept at attracting investments and the support from the Ministry is an assurance that the government is backing this investment drive.

“Government will provide the enabling environment, remove the roadblocks and red tapes to ensure that these investments thrive.”

Anite said the investment drive was not limited to only Nigerian Diasporans, but the ministry was also reaching out to all fund providers.

She said the ministry had also received support from development finance partners.

“I have no doubt that with the success of this initiative, Nigeria will witness a boom in the formation of businesses, and a strong financial and capital market.

“Nigeria will also witness the creation of a strong economic and industrial base to catalyse a one trillion dollar Gross Domestic Product (GDP) economy.”

Anite said the ministry was set to host the Nigeria Investment Summit, a platform to connect domestic and global investors to Nigeria.

“We are creating and de-risking the investment opportunities in Nigeria, and will showcase these as we inaugurate our digital dealroom which will present the investment opportunities and help facilitate the investments to happen.”

She said this had become necessary because most contracts issued in Nigeria had other jurisdictions as places for arbitration, mostly England.

“We have observed that this is so because most businesses experience delays in the arbitration and legal process for enforcing contracts.

“This red tape will be removed with the automated commercial courts, and this will boost investor confidence and increase investment flows.” (NAN) 

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