AfreximBank unfolds $1b investment in Nigeria, others

Urges development of ‘blue economy’ for diversification

Nigeria’s quest to export value added commodities, increased output and enhanced foreign exchange under the non-oil sector would soon record a boost.This is because not less than $1 billion has been earmarked by the Africa Export-Import Bank (AfreximBank) for the development of agriculture and industrial processing parks, which will cut across several countries in the continent.

Meanwhile, the bank said Nigeria stands to earn a huge share from the development of its coastal lines and harnessing of the large territorial waters, globally called the “Blue Economy”, as part of its diversification strategy.President of AfreximBank, Dr. Benedict Oramah, while addressing journalists on the sidelines of the ongoing 23rd yearly general meeting and related events of the financial institution, said it is regrettable that Nigeria continues to sit atop great opportunities without taking any advantage.

The investment plan, according to the bank, is being finalised in association with Export-Import Bank of China, in an effort to reduce the quantum of export of raw commodities from the continent, which are priced low and consequently earn little foreign exchange.

Lamenting the level of infrastructure deficit in the country, he said that the situation could have been different had successive governments taken advantage of resources at their disposal to invest in critical segments.

Citing World Bank report, which said that Nigerian manufacturers and indeed, Africa as a whole, can compete globally, he said that AfreximBank has taken it upon itself to finance value added propositions in the continent.

He said that the move to develop the agriculture and industrial processing parks arises from the fact that rising costs in China is estimated to cut 85 million jobs in the country and the jobs are headed towards Africa, with Nigeria in view due to its potential- particularly the alluring population.

“Nigeria needs definitive decision to get out of the oil economy. This involves credible and coherent industrial policy. For now, there is none. The policy should be anchored on macroeconomic policy that supports industrial development.“Everything is on the side of the country. It has the population, increasing middle class, thriving sectors- entertainment, among others, despite challenges and migrant remittances that is highest in Africa estimated at between $25-$30 billion,” he said.

According to him, the rising number of Nigerians in Diaspora means a large market for the development of the country’s export items and the blue economy through value addition to commodities extracted from the large ocean.He said that through the bank’s financing activities in efforts to change the profile of raw commodities’ export, Côte D’Ivoire has now attained the status of World’s biggest cocoa processor and have already provided two hectares of land for the agriculture and industrial processing parks.

The Chief Economist and Director of Research, Afreximbank, Dr. Hippolyte Fofack, while citing the examples of raw commodity export and its economic challenges, noted that Nigeria has been hit hard as it now scamper for foreign exchange to fund its imports.

An important challenge facing the region, which has exacerbated the risks and macroeconomic difficulties associated with the end of the commodity market super-cycle, according to him, is the deficit of industrialization.

Despite the progress made over the last decade, especially with the rise of cross-border investments and emergence of African industrialists, the contribution of the region to global manufacturing exports remains very low, and remarkably declining in relative terms;

Less developed countries in Africa remain on the margins of industrialization, as exemplified in the share of Africa’s manufacturing value added in the Gross Domestic Product.He said individual countries must now expand their sources such that when aggregated, it would lift the continent.

The Executive Vice-President, Corporate Governance and Legal Services, Afreximbank, Dr. George Elombi, like a warning, said that failure to tap the Blue Economy in a continent where opportunities for growth and economic development abound can become risk and liability, especially when natural resources are exploited in a way that does not fully benefit the population- gas flaring in Nigeria.“Then, Blue Economy can suddenly become economy in the blues,” he said.According to him, there are immense potential of the Blue Economy in promoting economic growth and transformation of African economies.

“It is estimated that Africa’s ocean economy is three time the size of its land mass with over 90 per cent of the continent’s imports and exports conducted by Sea and 38 of the 54 African states being coastal states.

“Blue Economy champions development of Japan, Iceland, and Singapore, and proper harnessing of Africa’s blue resources with appropriate investment has the potential to contribute immensely to the process of structural transformation of its economies and redefine the continent’s growth and development model with vibrant fishing, aquaculture, maritime culture, pharmaceutical, chemical and cosmetic sector,” he said.

Already, the dialogue on the virtues of the Blue Economy is now getting traction with Mauritius being the leading African nation in terms of the Blue Economy with a developed fishery industry, and the contribution of fisheries, tourism, ocean minerals and marine-related activities accounting for the bulk of its GDP.

Seychelles is also recognised in terms of development of the Blue Economy with a dynamic fishery sector, while Mauritania signed a fishery partnership with the European Union to support the country’s fishery industry.South Africa is also developing a Blue Economy Strategy in an effort to optimize the use of its ocean resources to full potential.