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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.
A total of 595 well re-entries and 145 new well-drilling operations, alongside 39 Field Development Plans (FDPs) have been approved in the first 10 months of 2026, as Nigeria intensifies efforts to ramp up crude oil production and attract fresh investments.
In addition, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has sanctioned 740 drilling-related operations in the same period, as Nigeria’s total rig count rose to 100, with 46 currently active in drilling operations.
These details were made public during the management session of the 44th Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos on Tuesday, by the Chief Executive (CE), NUPRC, Oritsemeyiwa Eyesan.
The conference is held under the theme, “Energy Security in an Era of Global Disruption: Positioning Nigeria for Resilience, Competitiveness, and Prosperity.”
The approvals, which underscore increased regulatory activity in the upstream petroleum sector. Eyesan, who was represented by the Deputy Director, Basinal Administration, NUPRC, Ahmad Abdullahi, said the increased approvals reflected improvements in the Commission’s regulatory processes, particularly the time required to grant operational clearances.
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According to her, faster approval processes have reduced delays and the additional costs incurred by operators while waiting for regulatory authorisation to execute projects.
“Year to date, about 39 FDPs have been approved. About 145 new well-drilling approvals granted. Year to date, about 595 well re-entry approvals were granted.
That goes to tell that as a commission, we have improved our approval time level, which again reduces costs that are being wasted or for projects to continue to wait for approval,” she said.
She explained that the Commission’s priority was to ensure that regulatory approvals translated into increased production and adequate energy supply.
“From the regulator’s perspective, to ensure that our energy security is not threatened, we must ensure that we approve Field Development Plans and new well-drilling applications to meet our production targets and guarantee energy availability,” Eyesan stated.
On drilling activities, the NUPRC boss said Nigeria’s rig count had increased by more than 300 per cent compared with the level recorded in 2021, reflecting renewed activities in the upstream industry.
“We have more than 100 rigs in country. About 46 rigs are actively involved in drilling year to date. If you compare this with maybe what we had in 2021, you will see that you have more than about 300 per cent increase,” she said.
Eyesan attributed the growth in investment activities to improved regulatory certainty, noting that investors were more willing to commit capital when they had confidence in the policy and operating environment.
She also identified the Petroleum Industry Act (PIA) as a major factor in rebuilding investor confidence, particularly in the acquisition of seismic data required for oil and gas exploration.
The NUPRC chief disclosed that multi-client seismic companies had invested more than $100 million in seismic data acquisition in Nigeria within three years of the enactment of the PIA.
“Based on our record, in the last three years, from the enactment of PIA, multi-client companies have invested more than $100 million in acquiring seismic data in Nigeria,” she said.
The investments are expected to deepen geological understanding of the country’s sedimentary basins, improve exploration decisions and support the discovery of additional hydrocarbon reserves.
On efforts to tackle crude oil theft and improve security across the industry, Eyesan said the Commission had introduced initiatives, including the Advanced Cargo Declaration programme and coordinated surveillance operations involving the Nigerian National Petroleum Company Limited (NNPC), private security operators such as Tantita Security Services and the Nigerian Navy.
She said the Commission’s responsibility went beyond punishing errant operators and perpetrators of oil theft.
According to her, the broader objective was to establish an operating environment in which legitimate crude oil production would be more profitable than crude oil theft.
President/Chief Executive, Dangote Industries Limited, Aliko Dangote, has declared that over 90,000 people are expected to be working at the group’s petroleum refinery & petrochemicals and fertiliser operations in Lagos next year.
This is as the group accelerates investments to create jobs, strengthen industrial production and transform agriculture across Africa.
Dangote, who disclosed this in an interview, also unveiled plans to establish 20 fertiliser blending plants in strategic locations across the continent to improve farmers’ access to essential inputs and support year-round supply. The projects form part of an investment programme that could reach $65 billion over four years, spanning refining, fertiliser, petrochemicals, power, pipelines and other businesses.
“The refinery expansion is huge. By next year, we expect to have almost 90,000 people working on the refinery and fertiliser projects in Lagos,” he said.
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Dangote said creating opportunities for Africa’s youthful population was a central motivation for the group’s expansion, stressing that the continent needed more factories and greater domestic production to meet its growing needs. “My biggest concern is job creation in Africa. We have a very youthful population, and we are not creating enough jobs. We must push harder to create opportunities and keep our young people productively engaged,” he said.
The refinery expansion will add another 700,000 barrels per day of processing capacity, taking the planned total to about 1.4 million barrels per day, alongside additional petrochemical facilities and infrastructure. Beyond energy, Dangote outlined a fertiliser expansion programme designed to help turn Africa’s agricultural potential into greater production, more reliable food supplies and economic opportunities.
“We also plan to establish 20 blending plants in strategic locations across Africa. We intend to begin mining potash and phosphate in Congo-Brazzaville very soon,” he said.
He disclosed that the group was working towards nine million tonnes of urea capacity, with plans for 1.2 million tonnes of diammonium phosphate, DAP, and one million tonnes of NPK blending capacity in Lagos. Dangote said the objective was to ensure that farmers in countries hosting the group’s operations, as well as neighbouring markets, could obtain fertiliser when needed, without the uncertainty associated with lengthy import and delivery processes.
“What we want is for the countries where we operate, and their neighbours, to have fertiliser available 365 days a year. Farmers should be able to buy it when they need it, without worrying about supply,” he said.
Citing Ethiopia, he explained that fertiliser imports had to pass through Djibouti before being transported inland, creating logistical challenges that could leave supplies arriving after the planting season. “With local production, the fertiliser will be available there. We will also have one million tonnes of NPK capacity attached to the project,” he said.
Dangote linked the programme to his determination that Africa should build the capacity to meet its own agricultural input requirements, rather than remain vulnerable to disruptions in international markets. “At the beginning of the Russia–Ukraine crisis, the African Union went to Russia to plead for fertiliser. I said then that, within four years, Africa should never again have to go anywhere to beg for fertiliser,” he said.
He expressed confidence that sufficient access to gas would enable a much larger expansion in fertiliser production. “If Africa needs 30 million tonnes and we can secure enough gas, we can produce and supply it,” he said. “Africa has an enormous agricultural advantage. We must lead the effort to turn that opportunity into a major agricultural transformation.”
The group’s wider investment programme includes an initial ambition to develop 10,000 megawatts of power with some African countries and increase cement capacity to 100 million tonnes. Dangote said reliable electricity was essential to industrial growth, enabling African countries to process their raw materials, retain more value within their economies and create opportunities for their people. He disclosed that approximately $50 billion of the planned investment would go into existing businesses, while another $15 billion would be directed towards new ventures, including projects yet to be announced. The programme would be financed through a combination of free cash flow, internally generated equity and debt, he said.
Dangote urged African investors to take the lead in developing the continent, arguing that substantial domestic investment would encourage international capital to follow.
“I am tired of hearing about ‘potential’. We have been talking about Africa’s potential for decades. But Africans themselves must invest in their continent,” he said. “What gives other investors comfort and confidence is seeing us put our own money on the table. That is what we are trying to do. We are demonstrating that we are serious.”
He argued that sustained investment by African businesses was essential to unlocking the continent’s industrial and agricultural opportunities, while giving international investors the confidence to participate.
“Governments are always calling for foreign investors. But what attracts a foreign investor is a domestic investor,” he said. “We must demonstrate that we are doing something substantial in Africa so that others can join us.”
Photo Caption: Group President/Chief Executive, Dangote Industries Limited, Aliko Dangote (left), in conversation with the President of the Republic of Namibia, H.E. Dr Netumbo Nandi-Ndaitwah, during the official launch of the Dangote Namibia Tank Farm and Regional Pipeline Investment in Walvis Bay, Namibia, recently.
The quest for diversified fuel sources with a view to reducing cost of transportation has seen operational CNG stations in Nigeria rise to 106.
The Executive Chairman of the Presidential Initiative on Compressed Natural Gas and Electric Vehicles (Pi-CNG & EV), Barr. Ismaeel Ahmed, has stated this during the commissioning of a CNG Integrated Refueling Unit (IRU) Station by Pi‑CNG & EV and Rolling Energy, in Karu.
According to Ahmed, 170 stations are in different stages of development or waiting for different licences from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
He added that investors are trooping into the sector as $2.6 billion worth of private investment has come in, adding that while most of the stations are privately-owned, the government is intervening with policies that will make their construction easy.
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He stated that it took Nigeria 60 years to get to 24,000 PMS stations but the rate of construction of CNG stations makes the country the fastest adoption rate for CNG and electric vehicles.
“We are moving at a scale that is very impressive. The work is in progress and a lot of entrepreneurs are seeing the need for this and they are coming in and we’re calling them to come in and invest more,” he said.
He added that the route where CNG buses are plying has led to reduction in transport fare but he said there is the need to do more in providing additional buses for fares to crash.
On his part, the State House Permanent Secretary, Temitope Fashedemi, said the use of CNG will help to reduce the burden of increasing the price of petrol.
He added that Nigerians will soon see the availability of the product when more investors build new stations and the Ajaokuta-Kaduna-Kano pipeline is completed.
“The stations will reduce the pressure in other places that we’re going to, and they can come here and refuel at any time, and even convert. And hopefully this will also be a clarion call for persons with the capacity to also set up things like this for the benefit of the citizens.”
The Chairman and Founder of Rolling Energy, Mubarak Umar Danbatta, said the station will help the government achieve its goals in ensuring that Nigeria is energy secure.
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