ABUJA—VICE President Yemi Osinbajo, yesterday, declared that despite the monumental challenges posed by climate change, the coming decade anchored on the African Continental Free Trade Area (AfCFTA), offers great opportunities for socio-economic transformation.
According to him, “the free trade agreement presents a major opportunity for African countries. By some estimates, if we get it right, we can bring several millions out of extreme poverty and raise the incomes of 68 million others who live on less than $5.50 per day. There are potential income gains of up to $450 billion, and just cutting red tape and simplifying customs procedures alone could drive up to $250billion of that sum.
Continuing, the Vice President noted that “we can expect to see more well capitalized insurance providers from other African countries coming to compete in the Nigerian market. And we shouldn’t be surprised if this happens quickly.
“Services can be set up faster than manufacturing plants. Nigerian financial services companies, especially banks, are already in many African Countries, the likes of Zenith, Access, UBA. How about Insurance companies? We should now be looking at developing homegrown international African insurance conglomerates. The time is now.”
On the issue of climate change, Prof Osinbajo probed, “how is the African insurance industry preparing for the interesting days ahead?”
“Here in Nigeria, the growing intensity of flooding and damage to vast agricultural acreages might have a knock-on effect on other areas of the economy. Further slumps in the economy is bad for everyone, even insurers.”
Prof Osinbajo then added that, “for Africa, there is perhaps a more significant challenge. In the past two years, the wealthier countries, after building their own economies on fossil fuels, are now banning or restricting public investments in fossil fuels, including gas. Seven European countries, including France, Germany, and the United Kingdom, announced that they would halt public funding for certain fossil fuel projects abroad.
“Also, the World Bank and other multilateral development banks are being urged by some shareholders to do the same. The African Development Bank, for instance, is increasingly unable to support large natural gas projects. Already, some OECD based insurance companies are already committing to reducing their commitments to carbon intensive industries by 2030.”
Explaining the implication of the trend on Africa’s growing oil and gas markets, Prof Osinbajo said, “I think African insurance companies must now speak and act differently.”
“You must be at the forefront of the campaign for a just and equitable transition to a low carbon future. This means that we cannot accept a defunding of gas projects when gas is an important transition fuel for us. Not just to get our people from the environmentally damaging firewood to cooking gas, and also autogas for our auto vehicles, but to also provide much needed power for industries and domestic use.
“Africa’s economic future might really be at risk if we do not find our voices and, in unison, insist that the necessary speed to zero emissions must not mean disaster for our African economies,” the Vice President added.
By: Johnbosco Abgakwuru