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Nigeria, Others May Lose $10bn To Political Tensions – IMF
The International Monetary Fund has said Nigeria could lose an estimated $10bn of foreign direct investment and official development assistance inflows to geo-political tensions.
The IMF in its country focus on Sub-Saharan Africa, released on Monday, said the figure is about a half per cent of the nation’s annual Gross Domestic Product.
The Washington-based lender said, “The losses could be compounded if capital flows between trade blocs were cut-off because of geo-political tensions. The region could lose an estimated $10bn of foreign direct investments and official development assistance inflow is about half a percent of GDP a year based on an average 2017–19 estimate). The reduction in FDI, in the long run, could also hinder much-needed technology transfer.”
IMF further said that if geopolitical tensions were to escalate, countries could be hit by higher import prices or even lose access to key export markets.
It added that about half of Sub-Saharan Africa’s value of global trade could be impacted.
The Washington-based lender also said that Sub-Saharan Africa could stand to lose the most if the world split into two isolated trading blocs centered on China or the United States and the European Union.
The IMF added the region’s economy could experience a permanent decline of up to four percent of its gross domestic product after 10 years.
“Sub-Saharan Africa could stand to lose the most if the world were to split into two isolated trading blocs centered around China or the United States and the European Union. In this severe scenario, sub-Saharan African economies could experience a permanent decline of up to four per cent of the real Gross Domestic Product after 10 years. According to our estimates, these are losses larger than what most countries experienced during the global financial crisis.”
According to IMF, economic and trade alliances with new economic partners, predominantly China, have benefited the region.
According to the report, economic trade alliances have also made countries reliant on imports of food and energy more susceptible to global shocks, including disruptions from the surge in trade restrictions following Russia’s invasion of Ukraine.
It added, “For countries looking to restructure their debt, deepening geo-economic fragmen¬tation could also worsen coordination problems among creditors. The region would fare better if only the US/EU cut ties with Russia and sub-Saharan African countries continue to trade freely. In this scenario trade flows would be diverted towards the rest of the world, creating opportunities for new partnerships, and possibly boosting intra-regional trade.”
However, IMF said that because some African countries benefit from access to new export markets and cheaper imports, the region would not incur a GDP loss.
It added that oil exporters supplying energy to Europe could even gain. IMF called for strengthening the African Continental Free Trade Area to better manage these shocks properly.
It added, “To better manage shocks, countries need to build resilience. This can be done by strengthening the ongoing regional trade integration under the African Continental Free Trade Area, which will require reducing tariff and non-tariff trade barriers, strengthening efficiency in customs, leveraging digitalization, and closing the infrastructure gaps. Deepening domestic financial markets can also broaden sources of financing and lower the volatility associated with relying too much on foreign inflows. To take advantage of the potential shifts in trade and FDI flows, countries in the region can try to identify and nurture sectors that may benefit from trade diversion like energy. Commodity exporters in the region could potentially displace much of Russia’s energy market share in Europe.”
IMF advised countries in the region to rely on trade promotion agencies to help identify potential opportunities and build the necessary skills and capacity for exports.
“Countries can also rely on trade promotion agencies to help identify potential opportunities, build the necessary skills and capacity for exports, and eventually re-orient production to take advantage of new trade flows. Improving the business environment by lowering entry, regulatory, and tax barriers could also help. What the exact outcomes will be from fragmentation and polarization, and whether these trends will continue are uncertain. What is clear, however, are multilateral institutions will need to continue to facilitate dialogue among nations to promote economic integration and cooperation.”
Rivers State Governor, Sir Siminalayi Fubara, has described the ongoing construction of the brand new 13.52-kilometre Ngo-Atlantic-Oyorokoto Road as a bold and visionary effort by his administration to open up the coastal region for economic growth and harness the full potential of the state’s blue economy.
The Governor made this remark during an inspection visit to the project site in Andoni Local Government Area. The road, being constructed by Monier Construction Company (MCC), cuts through challenging coastal terrain and leads to a newly identified beachfront facing the Atlantic Ocean.
Governor Fubara explained that while the original plan was to construct a road leading to Oyorokoto Town and its popular beach, his administration decided to expand the project to create an entirely new route that would open access to another pristine beachfront.
“We are doing another inspection today. This particular one is a virgin road, 13.52 kilometres of a new pathway to the blue economy,” Governor Fubara stated.
“Initially, we were constructing a road to Oyorokoto Beach, one of the finest tourist centres in this area. But as we progressed, we discovered another beach directly facing the Atlantic Ocean. It became clear that we shouldn’t limit development to just one site. We want to harness this new beach front as part of our broader plan to develop the blue economy.”
The Governor emphasised that the project, once completed, will not only improve access to coastal communities but also stimulate tourism and economic activities, boosting revenue for Rivers State.
Describing the area’s difficult terrain as challenging, he commended the contractor for its dedication, and expressed confidence that the road would be completed and commissioned by March next year.
“You can see for yourself, it’s a brand-new road in a very difficult terrain, just like the one we saw yesterday. But I strongly believe we will overcome it. From what we’ve seen today, the contractor, MCC, is doing their best, and by next year, hopefully by March, we’ll have the cause to commission this project and give God all the glory,” the Governor affirmed.
Governor Fubara also visited Opobo/Nkoro Local Government Area to assess the progress of work on the Epellema axis of the ongoing 5.2km Kalaibiama-Epellema road project featuring a 450-meter bridge.
Rivers State Governor, Sir Siminalayi Fubara, has expressed satisfaction with the level of progress recorded on the ongoing Trans-Kalabari Road project, revealing that about 75 percent of the critical piling work has been completed.
Governor Fubara made this known while addressing journalists after an on-the-spot inspection of the 12.5-kilometre road project, which will connect the state capital to several Kalabari communities across the sea.
The Governor rode on a boat from a jetty at Rumuolumeni in Obio/Akpor Local Government Area through the rivers and creeks on the project route during the inspection.
The project was awarded to Lubrik Construction Company Limited, on May 15, 2024, with an initial 32-month completion timeline.
The Governor said the visit was aimed at verifying reports from the Ministry of Works regarding the project’s advancement. He commended the contractors for their dedication, and described the progress as “a true reflection of hard work and commitment to excellence.”
“The first phase of the project takes us to Bakana, and features four major river-crossing bridges and nearly five deck-on-pile structures. The terrain is difficult, and the engineering work required is complex. But to the glory of God, I can confirm that the reports I’ve been receiving are accurate. Almost 75% of the piling job, which is the most critical part of the project, has been achieved,” Governor Fubara said.
He emphasised that the Trans-Kalabari Road is one of the most technically demanding infrastructure projects in the state due to its challenging marine terrain but reaffirmed his administration’s resolve to deliver it on schedule.
Governor Fubara highlighted the strategic importance of the road in connecting the Kalabari Kingdom to Port Harcourt, and stimulating economic growth across riverine communities.
“This is a key project that will turn around the lives of the Kalabari people immediately it is concluded. By the grace of God, in the next six months, if we return here for inspection, we might be driving across the bridge,” he said.
Governor Fubara assured Rivers people that his administration remains focused on delivering transformative infrastructure projects that will improve lives and bring lasting development to rural communities.
“We have made a promise to our people to embark on projects that will change lives and bring development, and this is a testament to that commitment,” he added.
The Governor of Rivers State, Sir Siminalayi Fubara, says that the impact of flooding and erosion on the inhabitants of Rivers State, especially those living in coastal communities, are of great concerns to the government.
Governor Fubara lamented the consequences of flood on both human and biotic life, which sometimes lead to loss of life, property, and degradation of the environment.
The Governor made the remark in Port Harcourt during the launch of a book titled, ‘Coastal Zone Flooding And Erosion in Developing Communities, Principles, Cases and Strategies,” written by Emeritus Prof. Wiston Bell-Gam.
According to the Governor, who was represented by the Secretary to the State Government, Hon. Benibo Anabraba, his administration, would continue to undertake and encourage adaptation strategies to combat flooding.
In his words: “The Rivers State Government will continue to undertake and encourage adaptation strategies, such as construction of seawalls and breakers, canals and channels, restoring coastal ecology and ecosystem for coastal resilience and where necessary, the relocation of communities on the coastline.
“These issues are currently receiving the much needed attention and intervention by the recent approval of the construction of shoreline protection along the coastlines of more than five communities in Ogba/Egbema/Ndoni and Opobo/Nkoro LGAs respectively.”
“It is important that as stakeholders in the protection and preservation of marine environment, we all act and advocate for mitigation strategies such as reduction in emission of Green House Gasses that causes climate change and rise in sea levels. Let us promote the use of clean energy and against fossil fuel.
Governor Fubara further cautioned residents to desist from building on waterways.
“We also need to encourage our people to stop developing buildings on and along natural water courses, indiscriminate sea mining and dredging activities on our coastline without consideration for mangroves and swamps,” he stressed.
He appreciated the author for his advanced contributions to the body of knowledge in both Rivers State and globally.
Also speaking, a former Military Governor of the old Rivers State and Amayanabo of Twon Brass, King Alfred Ditte-Spiff, who was Royal Father at the Event, stated that the book was timely to enable stakeholders manage the challenges of global warming.
“Global warming is real. If it’s not addressed globally, a time will come coastal areas will find themselves under water. The coastline of Nigeria is shocking with many mangroves gone,” he noted.
The Reviewer of the Book, who is also the Vice Chancellor of Olusegun Agagu University of Science and Technology, Ondo State, Prof Temi Ologunorisa, explained that the 14-chapter book is timeous as it fills literary gaps between desire and available knowledge on coastal flood and erosion in developing communities.,
“A major beauty of the book that sets it apart is the detailed consideration of flood and erosion control from around the world,” he stated, adding that the book is based on detailed field investigation.