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African Ministers and Experts Spotlight Efforts to Incorporate Natural Wealth Accounting in Development Planning
NAIROBI – Wealth accounting and the valuation of ecosystem services are critical to Africa’s future growth, as the continent undergoes unprecedented development.
Projections point, for example, to broad-based acceleration in growth in Sub-Saharan Africa to around 5.5 per cent in 2013-2014, reflecting robust domestic demand and increased investment in export-oriented sectors as the main economic drivers, according to the IMF World Outlook 2013.
Achieving long term development and poverty alleviation in Africa relies on the sustainable and optimal management of the natural resource base.
Natural capital is a critical asset, especially for low-income countries, where it makes up around 36 per cent of total wealth, according to recent World Bank estimates.
The international conference on “Valuation and Accounting of Natural Capital for Green Economy (VANTAGE)” in Africa – taking place in Nairobi on 3 and 4 December 2013 – brings together African ministers, renowned economists, scientists and development experts to review and recommend policy action towards incorporating the valuation of natural resources and ecosystems services in development planning and accounting.
UN Under-Secretary General and UNEP Executive Director, Achim Steiner, said, “Natural accounting and valuation is not a fringe activity, but a cornerstone of the wealth of nations upon which sustainable, equitable and prosperous societies will be built.”
“Africa stands to be a key player in the framing of a landscape of more intelligent management of the natural world – because Africa still has many of the resources that elsewhere in the world are increasingly in short supply. Sustainably managed resources can benefit and grow Africa domestically and globally while becoming a beacon of profiting from its rich and abundant nature-based assets,” said Mr. Steiner.
“The time has now come to ensure that by 2015 – when the UN’s Millennium Development Goals transcend into the Sustainable Development Goals – the global community has the strategies and the policies in place to ensure that nature is fully integrated into economies everywhere in a convincing way that leaves no margin of doubt in the minds of governments, business and wider society that a transition towards an inclusive Green Economy is not just about reforming and retooling energy infrastructure to new patterns of mobility – but is predicated on a new and fundamental relationship between economy and the ‘soft infrastructure’ of nature and its true wealth and value to us all”, he added.
As of 2005, half of Africa’s most biologically rich terrestrial areas lost more than 50 per cent of their area due to cultivation, degradation or urbanisation.
In Kenya, for example, deforestation stripped the country’s economy of an estimated US $68 million in 2010, dwarfing the economic benefits gained from industries such as forestry and logging.
According to the World Bank, Africa’s population is expected to increase by approximately 800 million people by 2040.
This projected increase will put even more pressure on the continent’s natural resources.
“This year marked the celebration of the 50th Anniversary of the Organization of African Unity predecessor to the African Union with a new vision, Africa’s ‘Agenda 2063′ which charts the continent’s trajectory to prosperity,” said Tumusiime Rhoda Peace, Commissioner of the Department of Rural Economy and Agriculture of the African Union Commission.
She added: “Natural resources are a critical asset to many African communities and nations who depend almost entirely on ecosystems for their survival and economic development. Knowing the value of our natural capital does not only contribute to the optimal use of our resources but also makes it possible to resolve trade offs across time and space. The VANTAGE initiative is exactly what we need in this continent. This will pave the path for effective and efficient use of natural capital.”
Innovative wealth indicators
Recent years have seen a growing recognition that a new system of resource valuation and accounting is urgently needed, in particular to help countries more accurately assess the wealth and wellbeing of their populations.
In May 2012, 10 African countries, along with various public and private organizations, adopted the Gaborone Declaration, which outlines a set of concrete principles and development goals that include valuing natural capital in the development planning process.
One month later, the Rio+20 Summit outcome document, The Future We Want – endorsed by more than 190 countries – called for broader measures of progress to complement conventional indices, such as GDP.
Released alongside the Rio conference, the Inclusive Wealth Report 2012 – published jointly by UNEP and the United Nations University’s International Human Dimensions Programme on Global Environmental Change (UHU-IHDP) – provided a rethink of traditional economic and development yardsticks. It introduced a new indicator, known as the Inclusive Wealth Index (IWI), which is aimed at revealing the true state of a nation’s wealth and the sustainability of its growth, beyond GDP.
For example, if measured by GDP, the economies of China, the United States, Brazil and South Africa grew by 422 percent, 37 percent, 31 percent, and 24 percent respectively between 1990 and 2008. However, when assessed by the IWI, the Chinese and Brazilian economies only increased by 45 percent and 18 percent. The United States’ grew by just 13 percent, while South Africa’s actually decreased by 1 percent.
In fact, a full 25 percent of the countries studied by the report showed a positive trend when measured by GDP per capita and by the Human Development Index (HDI) were found to have a negative IWI per capita. The primary driver of this difference in performance was those countries’ declines in natural capital.
Valuing ecosystems
Other recent studies have also explored the benefits of placing a value on critical natural resources.
A 2011 UNEP report entitled, Putting Ecosystem Management in the Vision of Africa’s Development, focuses specifically on ecosystems and ecosystem services – which include the multitude of resources and processes that are supplied by ecosystems, from the production of food and water, to the control of climate and disease, to water cycling and crop pollination.
According to the report, growth accounting without explicit valuation of ecosystem services is an incomplete analytical framework
It finds that there is an urgent need to increase national awareness of the role of ecosystem services in the development process and to work towards relevant legislation and institutional reforms.
Ecosystems serve a myriad of purposes in both the earth’s natural processes and in human life, and contribute significantly to a nation’s wealth. Without full valuation of less-tangible benefits from ecosystems, their exploitation will remain unsustainable and degradation inevitable.
Some examples of the potential economic value of ecosystems are:
• Forestry in Tanzania is officially close to 2.3 percent of GDP, however research suggests that if the wider benefits are factored in, the real contribution is over 4 percent of GDP.
• Emerging research suggests that the contribution of the value of forests to the GDP of Uganda is around US $136 million, which amounts to about 4 percent of GDP.
An estimated 486,000 work opportunities were created in South Africa in environmental rehabilitation programmes since 1995. In addition, 85,000 jobs were created through formal conservation of protected areas in game ranching and ecotourism. “Decoupling” resource consumption and economic growth
Placing a value on natural resources also demands a rethink of the traditional links between resource use and economic prosperity – separating environmental “bads” from economic “goods”.
By 2050, humanity could devour an estimated 140 billion tonnes of minerals, ores, fossil fuels and biomass per year – three times its current appetite – unless the economic growth rate is “decoupled” from the rate of natural resource consumption.
According to a UNEP report entitled, Decoupling natural resource use and environmental impacts from economic growth, technologies that have helped humanity extract ever-greater quantities of natural resources must be redirected to more efficient ways of using them.
Some improvements have been seen. Over the past century, pollution controls and other measures have reduced the environmental impacts of economic growth. And, thanks to innovations in manufacturing, product design and energy use – aided by the rising number of people living more efficient lifestyles in cities – the global economy has grown faster than resource consumption growth.
However, the report notes that those improvements have been relative. In absolute terms, total resource use grew eight-fold, from 6 billion tonnes in 1900 to 49 billion tonnes in 2000. It stresses that more remains to be done to reduce resource consumption while meeting the development needs of an equitable and sustainable society.
Deforestation in Kenya: a case study in natural resource accounting
In Kenya, recent economic valuations of the country’s forests have catalyzed a response to conserve and rehabilitate that vast natural resource.
Deforestation deprived Kenya’s economy of an estimated 5.8 billion shillings (US $68 million) in 2010, far outstripping the roughly 1.3 billion shillings injected from forestry and logging each year, according to a joint report by the Kenya Forest Service (KFS) and UNEP.
The Role and Contribution of Montane Forests and Related Ecosystem Services to the Kenyan Economy, released in 2012, points out that the contribution of forests is undervalued by some 2.5 per cent, putting the estimate of its annual contribution to GDP at around 3.6 percent.
Between 2000 and 2010, deforestation of the country’s water towers amounted to an estimated 50,000 hectares, leading to a reduced water availability of approximately 62 million cubic metres per year. This has also affected Kenya’s economy, which is vulnerable to inflation spikes during periods of drought.
In response, the Kenyan government is now working to rehabilitate the water towers, in particular the Mau Forest Complex. Between 2011 and late 2012, more than 21,000 hectares of forestland were repossessed and some 10,000 hectares were rehabilitated. A number of programmes and activities also were launched to improve the livelihoods of communities living in and adjacent to the forests.
As business confidence in Nigeria rose to the highest level in 14 months signalling a rising demand for their goods and services, Woodhall Capital International Foundation (WCIF), a subsidiary of Woodhall Capital, a leading financial advisory firm, in partnership with Mentor Intro Africa, has commenced the training of a new generation of Captains of Industry through a-six-week intensive mentorship programme.
Speaking about the programme which commenced with forty shortlisted mentees on Friday March 5 at EbonyLive Studios, Victoria Island, Lagos, the President of Woodhall Capital, Mrs. Mojisola Hunponu-Wusu, noted, “We are very excited to bring together 40 Captains of Industry and share ideas and visions on how to build sustainable businesses in Nigeria. It’s been a wholesome experience from 9am to 3pm. It’s so heartwarming to have found Captains of Industry who are indigenous to Africa and others who are going global. We shared ideas on how exactly we can accomplish these, the peculiarities of doing business in Nigeria, and the possibilities of Africans building offices around the world. That’s what we have started on Friday.”
Reinforcing what the partnership means to her, the Founder of Mentor Intro Africa, Mrs. Fola Niyi-Duale, remarked, “What we set out to do is to bridge the gap between career professionals and those who have already walked the path. It means we created a structured virtual platform where experienced industry leaders can guide, support, and inspire professionals and entrepreneurs on their journey to greatness. This is big because it epitomizes impact and we’re leaving a legacy for people to see and enjoy a future that we may not even be a part of, but we have laid the foundation.”
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Both partners reiterated that the mentorship is not for the optics and its impact upon completion would far-reaching.
One of the mentees, Co-founder/Chief Technical Officer, Blue Sands STEM LabsOveral, Kingsley Okechukwu, excitedly said, “I’m glad I got the opportunity to be part of this mentorship. Our first session reinforced the significance of visionary leadership, employee retention, continuous innovation, and strategic positioning in ensuring long-term business success.”
This collaboration between Mentor Intro Africa and Woodhall Capital Foundation brings together visionary leaders, seasoned professionals, and the next generation of changemakers in an empowering initiative designed to bridge mentorship with high-impact leadership.
Together, the partners aim to spotlight industry pioneers, foster meaningful dialogues, and create lasting impact across Africa’s business and professional landscape.
The Securities and Exchange Commission (SEC) has announced that His Excellency, President Ahmed Bola Tinubu, has assented to the Investments and Securities Act (ISA) 2024, which repeals the Investments and Securities Act No. 29 of 2007.
It was gathered that the landmark legislation strengthens the legal framework of the Nigerian capital market, enhances investor protection, and introduces critical reforms to promote market integrity, transparency, and sustainable growth.
The enactment of the ISA 2024 reaffirms the authority of the SEC as the apex regulatory authority of the Nigerian Capital Market. The new Act also introduces transformative provisions to further align Nigeria’s market operations with international best practice.
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Key highlights of the ISA 2024:
The Act enhances the regulatory powers of the SEC in a manner comparable with benchmark global securities regulators. These enhanced powers and functions ensure full conformity with the requirements of IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), enabling the SEC retain its “Signatory A” status and enhancing the overall attractiveness of the Nigerian capital market.
Other notable provisions of the ISA 2024 include:
Classification of Exchanges and inclusion of provisions on Financial Market Infrastructures- The Act classifies Securities Exchanges into Composite and Non-composite Exchanges. A Composite Exchange is one in which all categories of securities and products can be listed and traded, while a Non-composite Exchange focuses on a singular type of security or product. There are also new provisions on Financial Market Infrastructures such as Central Counter Parties, Clearing Houses and Trade Depositories.
Expansion of the definition and Understanding of Securities – The Act explicitly recognises virtual/digital assets and investment contracts as securities and brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs) and Digital Asset Exchanges under the SEC’s regulatory purview.
Comprehensive Insolvency Provisions for Financial Market Infrastructures – The Act introduces provisions that exempt transactions facilitated through or otherwise involving Financial Market Infrastructures from the application of general insolvency laws.
Management of Systemic Risk – The Act introduces provisions for the monitoring, management and mitigation of systemic risk in the Nigerian capital market.
Expansion of the Category of Issuers to the Public – The Act expands the categories of issuers, as a key step towards the introduction of a wide range of innovative products and offerings as well as the facilitation of “commercial and investment business activities”, subject to the approval of the Commission and other controls stipulated in the Act.
Legal Framework for Commodities Exchanges – The Act contains a new Part which provides for the regulation of Commodities Exchanges and Warehouse Receipts. These provisions are essential to allow for the development of the entire gamut of the Commodities ecosystem.
Issuance of Securities by Sub-Nationals and their Agencies – Salient provisions of the Act address existing restrictions in respect of raising of funds from the capital market by Sub-Nationals to allow for greater flexibility in this regard.
Transparency in Securities Transactions – The Act introduces the mandatory use of Legal Entity Identifiers (LEIs) by participants in capital market transactions. This stipulation is designed to improve transparency in the conduct of securities transactions.
Enforcement Against Illegal Investment Schemes – The Act expressly prohibits Ponzi Schemes and other unlawful investment schemes, while prescribing stringent jail terms and other sanctions for the promoters of such schemes.
Strengthening the Investments and Securities Tribunal – The Act amends some key provisions in the repealed ISA 2007 pertaining to the Composition of the Tribunal, constitution of the Tribunal, qualification and appointment of the Chief Registrar as well as the jurisdiction of the Tribunal to enhance the ability of the Tribunal to optimally discharge its mandate.
Commenting on this milestone, the Director-General of the SEC, Dr. Emomotimi Agama, lauded the President’s assent as a transformative step for the capital market and stated: “The ISA 2024 reflects our commitment to building a dynamic, inclusive, and resilient capital market. By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers the SEC to foster innovation, protect investors more efficiently and reposition Nigeria as a competitive destination for local and foreign investments. We commend all stakeholders within and outside the capital market community for their unwavering solidarity towards the achievement of this historic milestone and solicit their continued collaboration in respect of the effective implementation of the ISA 2024 for the benefit of our economy.”
The SEC extends its profound appreciation to the National Assembly for its patriotism and dedication in enacting this new legal framework for the Nigerian capital market. The meticulous deliberations, extensive stakeholder engagements, and bi-partisan support demonstrated throughout the legislative process highlight the National Assembly’s resolve to foster economic growth and enhance investor confidence.
We also commend the Honourable Minister of Finance and Coordinating Minister of the Economy of Nigeria as well as the Minister of State for Finance for their invaluable contributions to the realisation of this groundbreaking project. Their strategic guidance, policy expertise, and steadfast support have ensured that the ISA 2024 aligns with Nigeria’s broader economic objectives.
The SEC would continue to engage with market operators, investors, and all stakeholders to ensure a seamless transition from the repealed ISA 2007 to the new legal regime established under the ISA 2024.
Chairman of the Aliko Dangote Foundation (ADF) and Africa’s wealthiest person has continued to draw widespread commendation over the socio-economic impact of his national food relief programme, as the Foundation continues the distribution of 80,000 units of 10kg bags of rice to the vulnerable in Lagos State.
Biztellers reports that the Lagos flag-off of the nationwide rice distribution took place on March 18 at a well-attended programme at Lagos State Secretariat, Alausa, Ikeja, where Dangote was represented by an Executive Director of the Group, Hajiya Mariya Dangote, and received by the governor, Babajide Sanwo-Olu and top government officials.
Since the commencement of the distribution across the twenty local government areas in Lagos metropolis, there has been a gale of commendations for Dangote for his humaneness and heart of care in giving back to the society and assuaging the hunger of the less privileged and vulnerable in the society. The distribution of rice is taking place simultaneously with the existing daily distribution of thousands of loaves of bread in Lagos to the needy.
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To ensure a hitch-free and seamless distribution exercise in Lagos State, the eighty thousand 10kg bags of rice were allocated to various groups and associations. These include People Living with Disabilities, Market Women and Men, Non-Indigenes (Arewa, Ndigbo and South-South), Religious Groups, Artisans, National Youth Council of Nigeria, Joint Community Development Association, NUT, Hunters association, among others.
Chairman of Agbado Oke-Odo Local Council Development Authority (LCDA), Mr. Olabowale Kasumu, who supervised the distribution at the LCDA commended the Aliko Dangote Foundation, headed by the Managing Director/CEO, Mrs. Zouera Youssoufou for the wonderful gesture which he said has brought smiles and relief to many Nigerians.
Kasumu, who is also the Lagos State CDC Welfare officer said, “Aliko Dangote is a Nigerian that has chosen to be different. You have choices but you have made the right one which is caring for the vulnerable. I appreciate Aliko Dangote for extending his kind gestures to the people at the bottom of the pyramid.”
A beneficiary from Non-Indigene Group (Ndigbo), Chidi Ugwuba, appreciated the ADF for its kindness, which he said would alleviate the suffering of her family and others.
For the Coordinator of People Living with Disability in Egbe Idimu LCDA, Turkson Abigail, “the rice donation is a godsend, especially during this fasting period.”
The Chairman of the Ikorodu Local Government CDC, Elder Yekini Ogunjimi said, “This Dangote rice will go a long way and is coming at a good time, Ramadan and Lent period. We appreciate him and when the beneficiaries in groups receive the food palliative, they share amongst their members resulting in Aliko Dangote Foundation reaping many more blessings.”
Another leader, Niran Ogunbawo stated that the greatest challenge people are having is how to feed adding that the rice distributed will go a long way in feeding families and this will put smiles on their faces. He added, “I want to thank the Aliko Dangote Foundation for this gift to poor Nigerians. It is coming at a good time.”
Ms. Adeoti, a beneficiary from Odogunyan area of Ikorodu North LCDA stated the community was happy on getting the information the Dangote Foundation is distributing rice to residents, noting that “during this Ramadan period the rice will go a long way to support the family during Iftar.”
Chairperson of Ikeja Local Government, Alhaja Adefolani Taibat, speaking at the distribution in Ikeja axis described the initiative as a lifeline for many Lagosians who are either observing the Ramadan Fast or the Christian Lent. She said, “This would go a long way in providing relief to families, especially those who are in lack as a result of the current economic situation of the country. We commend Mr. Dangote for his moves to alleviate hunger in the land this period, as this would help lessen the hardship many Nigerians are facing to get food on their tables.” She also urged other thriving businesses to take a cue from what Dangote is currently doing to give back to the nation.
Chairman of the National Association of Persons with Physical Disabilities (Lagos Chapter), Kayode Shokunbi, in his remarks said, “Mr Dangote is well known for his philanthropy, and he has always rendered help when needed. We appreciate him for yet another great intervention this period, and I pray Almighty Allah blesses all his businesses just the way he has blessed us this season. Many thanks to Aliko Dangote Foundation and Lagos State government for actualising this.”
An artisan, Mr. Musa Fatai who spoke on behalf of others said, “We genuinely appreciate Dangote for his effort to feed the less privileged. Several persons are working tirelessly to make ends meet, but it has been exceedingly difficult to take care of their families. This programme, however, will lessen the burden even on the artisans. We urge him to keep up with the excellent work, and may Almighty Allah bless his bread too.”
Several other beneficiaries sang the praises of Dangote for his compassion and notable effort in helping struggling Nigerians. They all hailed “Mr. Dangote” as they joyfully received their bags of rice and headed home.
Recall that the ongoing Lagos gesture is part of the over one million 10kg bags of rice that would be distributed to reach one million people in the 774 local government areas of the country, under the National Food Relief Programme of the Aliko Dangote Foundation. The programme is being done to complement government efforts to assuage the hunger of the vulnerable and needy persons in the society across the country.
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