By Abdullahi Mohammed
Africa should be the breadbasket of the world, has no reason spending US$ 35 billion a year importing food, Adesina tells Agriculture conference in U.S.
The President of the African Development Bank Group Akinwumi Adesina, has made an urgent call to give farmers across the continent new technologies with the potential to transform agricultural production. Adesina said the technology transfer was needed immediately and that evidence from countries like Nigeria demonstrated that technology plus strong government backing was already yielding positive results.
”Technologies to achieve Africa’s green revolution exist, but are mostly just sitting on the shelves. The challenge is a lack of supportive policies to ensure that they are scaled up to reach millions of farmers,” Adesina said during a keynote speech delivered at the 2018 Agricultural and Applied Economics Association (AAEA) Annual Meeting held in Washington, D.C August 5, 2018.
Adesina cited the case of Nigeria, where policy during his tenure as the country’s Minister of Agriculture, resulted in a rice production revolution in three years.
“All it took was sheer political will, supported by science, technology and pragmatic policies…Just like in the case of rice, the same can be said of a myriad of technologies, including high-yielding water efficient maize, high-yielding cassava varieties, animal and fisheries technologies,” Adesina said.
The African Development Bank is pointing the way to how this can be done, and is currently working with the World Bank, the Alliance for a Green Revolution in Africa (AGRA), and the Bill and Melinda Gates Foundation to mobilize US$ 1 billion to scale up agricultural technologies across Africa under a new initiative called Technologies for African Agricultural Transformation (TAAT).
TAAT is taking bold steps to bring down some of the barriers preventing farmers from accessing latest seed varieties and technologies to improve their productivity.
“With the rapid pace of growth of the use of drones, automated tractors, artificial intelligence, robotics and block chains, agriculture as we know it today will change,” the President said. “It is more likely that the future farmers will be sitting in their homes with computer applications using drone to determine the size of their farms, monitor and guide the applications of farm inputs, and with driverless combine harvesters bringing in the harvest.”
Adesina used the opportunity to advocate for African universities to adapt their curriculum to enable technology-driven farmers and to focus on agribusiness entrepreneurship for young people, emphasizing the need to rise beyond theories to application.
Through its innovative Enable Youth initiative, the African Development Bank has in the past two years committed close to US$ 300 million to develop the next generation of agribusiness and commercial farmers for Africa.
Adesina stressed the Bank’s resolve to change the face of agriculture in Africa to unleash new sources of wealth.
AAEA President Scott Swinton said Adesina and the African Development Bank exemplify the use of economics that makes a difference in people’s lives.
“If applied economics is economics that make a difference, I think that there is no better example of someone who has used that than Akinwumi Adesina,” Swindon said.
Adesina told delegates at the 2018 conference attended by over 1,600 agricultural and applied economists from around the world: “There is no reason why Africa should be spending US$ 35 billion a year importing food. All it needs to do is to harness the available technologies with the right policies and rapidly raise agricultural productivity and incomes for farmers, and assure lower food prices for consumers.”
Adesina, who was the 2017 World Food Prize winner, is advocating for the creation of staple crops processing zones across Africa (SCPZs): vast areas within rural areas set aside and managed for agribusiness and food manufacturing industries and other agro-allied industries, enabled with right policies and infrastructure.
“I am convinced that just like industrial parks helped China, so will the SCPZs help to create new economic zones in rural areas that will help lift hundreds of millions out of poverty through the transformation of agriculture- the main source of their livelihoods- from a way of life into a viable profitable business that will unleash new sources of wealth,” he said.
The African Development Bank has already begun investing in the development of processing zones in a number of African countries, including Ethiopia, Togo, Democratic Republic of Congo, and Mozambique, with a plan to reach 15 countries in a few years.
To help Africa transform its agriculture, the Bank is investing US$ 24 billion over the next ten years to implement its Feed Africa Strategy.
African Development Bank and partners’ innovative Room2Run securitization will be a model for global lenders
Room2Run will create space for more lending in pursuit of development agenda
Sharing the lessons learned will shorten the path for other MDB’s
Room2Run, the African Development Bank and partners’ innovative US $1 billion synthetic securitization of a portfolio of seasoned African Development Bank private sector loans, will serve as a model for other lenders, help reduce costs, and shorten execution time, finance experts told participants at a workshop on Saturday.
The landmark securitization instrument, a first for any multilateral development bank, has been described by investors as a “strong market fit.” The instrument offers other multilateral development banks and investors a roadmap for innovative financing and new ways to explore the release of much-needed capital to impact financing and catalyze private capital in developing markets.
“This is particulat, asrly importan it opens the door for significant scale in the future, both in Africa and in other continents where your institutions are present and financing development projects,” said Swazi Tshabalala, the Bank’s Vice President of Finance.
About 70 participants from the international finance community – investors, bankers and other financial institutions, attended the workshop entitled “A Look at Optimizing MDB Balance Sheets Through Securitization, “organized by the African Development Bank and the Mariner Investment Group, LLC (Mariner), a key investor in the deal. The participants heard presentations on the structure of the securitization, challenges and lessons learned, followed by a question and answer session.
The workshop took place on the sidelines of the International Monetary Fund and World Bank annual meetings and the 2018 Global Infrastructure Forum in the Indonesian island of Bali. The AfDB’s Chief Risk Officer Tim Turner said the meeting was convened in response to massive interest from sister development institutions following the announcement of Room2Run in September, 2018.
The Bank, the European Commission, Mariner Investment Group, LLC (Mariner), Africa50, and Mizuho International plc announced the pricing of Room2Run on 18 September in Ottawa, Canada – the first-ever portfolio synthetic securitization between a Multilateral Development Bank (MDB) and private sector investors, pioneering the use of securitization and credit risk transfer technology to a new and previously unexplored segment of the financial markets.
Tshabalala said Room2Run was timely in the light of new regulations in banking that would see more traditional commercial bank lenders scaling back some of their activities in the project finance and trade finance markets. “These regulations will make investments in regions such as Africa more expensive and capital intensive, and this is why we have to find new avenues to crowd-in non-traditional sources of funding, ” Tshabalala said.
Describing Room2Run as the “crown jewel of our impact activity, Andrew Hohns, Lead Portfolio Manager of the IIFC Strategy, Mariner Investment Group, said that there is a common misconception about the performance of MDB’s loans as unattractive; but the risk perceptions were often unbalanced”, he said.
“These assets have performer pretty well,” Hohns, said, giving reasons for Mariner’s global involvement with impact financing – nearly US$14 billion of infrastructure assets covering 1,250 projects world-wide. Hohns said the investor’s decision to partner with the Bank rested on its strong track record. The Bank is by far the most positioned of institutions on the continent to offer this kind of securitization, he said and synthetic securitization deals such as Room2Run were a “strong market fit.”
“The level of interest in taking exposure to the assets within the MDB’s is high,” Hohns said.
Kay Parplies, Head of Unit Investment & Innovative Financing, European Commission, said Room2Run was “catalytic” and hoped its involvement would attract other private investors and rating agencies to refine their approaches to African assets. Parplies said our experience over two decades had shown many in the investor community that actual risks (in African investments) were often lower than the perceived risks.
Other presenters at the workshop included Juan-Carlos Martorell Co-Head of Structured Products Solutions, Mizuho International and Nicole Giles Director General, International Finance and Development, Finance Canada.
Room2Run Roadmap to be shared with MDB’s
Turner said the Bank would soon publish a detailed journey of the Room2Run initiative, including all the documentation involved in its set up, to encourage other MDB’s to consider adopting synthetic securitization models to free up capital and create new pathways for institutional investors to support development. The document would be a “technical manual” to help others lower the cost and shorten the time to develop similar transactions.
“There is no need for our development partners to redo what we did. This is a knowledge sharing session of learnings from the school of hard knocks,” Turner said.
By creating new pathways between those with savings and those needing capital for development projects, Room 2Run would generate excitement within investment spaces normally far removed from development financing.
“Imagine a pensioner in Toronto knowing that his retirement investments are financing a power plant that was giving electricity to a family in Yopougon (Cote d’Ivoire). It’s a win-win.”, Turner said.
Structured as an impact investment, Room2Run is designed to enable the African Development Bank to increase lending in support of its mission to spur sustainable economic development and social progress.
Synthetic securitization and other similar models are intended to bring together public and private capital to finance development.
“MDB’s need to look at more than the financial return,” Bank Director of Syndication & Co-Financing, African Development Olivier Weck said, adding that the Bank had itself invested time to educate its board about the deal. “We needed to demonstrate additionality and the development outcome,” Eweck said.
Room2Run, positions the Bank as an innovative leader in providing lending in pursuit of the global development agenda, which prioritizes its own High 5’s and the Sustainable Development Goals. Freed-up capital will be directed toward renewable energy projects in Sub-Saharan Africa, including projects in low income and fragile countries.
“The Bank is treating this (Room2Run) as a pilot project,” Hohns said. “Mariner is very much interested in doing more.”
NDIC PRESS RELEASE NDIC Assists Uganda Deposit Protection Fund
The Nigeria Deposit Insurance Corporation (NDIC) is assisting the Uganda Deposit Protection Fund (DPFU) to develop capacity to implement the Deposit Insurance System (DIS) in the East African country. The Corporation recently hosted a five-member delegation from DPFU who arrived the country to understudy the activities of the Corporation. The NDIC has been the destination of choice for several sister agencies and Central Banks from across the African continent eager to understudy the activities of the Corporation and learn from its rich experience in Deposit Insurance – a subject on which it is recognized as a leader in Africa.
The Ugandan team was only the latest delegation from several Africa countries to visit the Corporation for capacity building. The NDIC previously hosted delegations from the Reserve Bank of Malawi, Reserve Bank of Lesotho, Deposit Protection Fund Board of Kenya, Deposit Insurance Board of Tanzania, Commission Bancaire del’Afrique Centrale (COBAC) of Cameroun, Delegates from Banque Centrale Des Etats De L’ Afrique De L’ Ouest (BCEAO) in Senegal all of whom the NDIC assisted build the capacity for the implementation of the Deposit Insurance System (DIS) in their various jurisdictions.
Others include teams from the Central Bank of The Gambia, Bank of Tanzania, the Deposit Protection Corporation of Zimbabwe, and the Ghana Deposit Protection Corporation (GDPC). In September, 2018, the NDIC will also host the African Regional Conference of the International Association of Deposit Insurers (IADI).
Mohammed Kudu Ibrahim
Head, Communications And Public Affairs
Tuesday July 3, 2018
NDIC’s Continued Quest For Excellence
By The Communications & Public Affairs Unit, NDIC
Successful accomplishment of unique goals is often attended by a sense of pride, fulfillment and excitement. The sense of fulfillment is greater when such feats set the pace for others to follow. The Nigeria Deposit Insurance Corporation (NDIC) recently became the first public sector organization in Nigeria to achieve three International Standards Organization (ISO) certifications by the British Standards Institute (BSI) at once. The certifications are in Information Security Management System – ISO/IEC 27001:2013; IT Service Management System – ISO/IEC 20000-1: 2011 and Business Continuity Management System, ISO 22301: 2012. The ISO certification is an international standard that helps organizations achieve excellence and through the adoption of best practices in attaining their goals.
The Corporation achieved the certifications after the rigorous processes of satisfying the conditions which preceded its accreditation in July, 2017. NDIC deployed sound corporate governance, professionalism and dedication of its top Management and staff to achieve the feat, after the thorough audit of its internal processes and procedures all of which met the lofty criteria set by the BSI.
The certifications were formally presented to the Corporation at an impressive ceremony in Abuja on 21st May, 2018 by the representative of the British High Commissioner, Ms. Natasha Anjekwu who described the achievement as a remarkable feat by the NDIC. She added that the fulfilment of the stringent requirements for the certification bore eloquent testimony to the Corporation’s resolve and adherence to international best practices in all its operations.
While receiving the award, the NDIC Managing Director/CE, Mr. Umaru Ibrahim, expressed delight at NDIC becoming the first public institution in Nigeria to be certified with three standards at once. Speaking further, the NDIC Boss reiterated that the objectives of the certifications was to ensure that the Cooperation adopted international best practices in its operations to be able to achieve its vision of being “the best deposit insurer in the world by 2020”. He further stated that the impressive performance resulted from the unflinching desire and commitment of the entire Management and staff of the Corporation. The ultimate goal, he concluded, is to enhance the operational readiness of the Corporation towards the robust implementation of its mandates to Nigerians through the continuous improvement of its service delivery platforms for greater information security, efficient IT Management and a robust Business Continuity System.
Mr. Ibrahim further stressed that the Corporation had no intention on resting on its oars, adding that it had invested massively in capacity building by training 53 members of staff on the three standards and also established a world class Training Academy, along with the adopting of a Continuous Performance Management System to track and measure performance. He therefore assured of the Corporation’s desire to take the lead in addressing the challenges of the financial services industry in Nigeria with a view to engendering professionalism and accountability.
The NDIC boss said that because the Corporation was a player in a globalized world where peer review was not only necessary, but inevitable, it was important for it to standardize its processes particularly for effective service delivery. In that respect, he added, the Business Continuity Management Framework adopted by the NDIC was intended to strengthen its capacity to deliver its four critical mandates of Deposit Guarantee, Bank Supervision, Distress Resolution and Bank liquidation.
Other dignitaries who attended the ceremony congratulated the Corporation on the achievement. In her remarks, the Minister of Finance, Mrs. Kemi Adeosun, who was represented by the Director of Home Affairs, Mrs. Olubunmi Siyanbola, charged the Corporation to see its success as a genuine effort towards attaining more positive heights.
The National Coordinator/Chief Executive Officer (CEO), SERVICOM Office in the Presidency, Mrs. Nnenna Akajameli extolled NDIC for the achievement and urged the Corporation to see the certifications as a road map to greater performance. She said that going forward, the SERVICOM Office would use NDIC as a model of an ideal service delivery public institution in Nigeria for others to emulate.
The Business Continuity Management System (BCMS) attained by the Corporation is a policy instrument aimed at positioning the Corporation’s staff as its most critical asset towards guaranteeing their safety and wellbeing on critical activities that support the achievement of its mandate and meeting the expectation of its stakeholders. It provides resilience against disruption and threats and ensures effective response and recovery capability in the event of any business disruption.
IT Services Management System (ITSMS), is a strategic approach for delivering, managing and improving the way information technology is used within an institution while the Information Security Management System, is intended to guarded against any disruption of the use of information especially electronic data.
NDIC was established in 1988 to protect depositors of failed or failing banks and to also promote financial system stability. The Corporation promotes safe and sound banking practices, contributes to orderly payment system and enhance fair competition to boost public confidence in the banking system. The Corporation currently provides Deposit Insurance coverage up to N500,000.00 maximum limit per depositor of Deposit Money Bank and Primary Mortgage Bank (DMB/PMB); and N200,000.00 per depositor of Microfinance Bank (MFB) in the event of failure of such institutions.
With the ISO certification, it is expected that the Corporation will continue to benchmark its operations with international best practices in order to consolidate on its achievements as it approaches the 2020 threshold to emerge the best deposit insurer in the world.
Nigeria Wasted $1tn Earned in Oil Booms, Says Report By Iyobosa Uwugiaren and Chineme Okafor
But for the recurring wastefulness of federal government, the country could have used about $1 trillion it earned from its production and sale of crude oil in five different oil booms to develop and diversify its economic base, a report titled ”Stabilising Nigeria’s Volatile Economy”, has disclosed.
The report which was co-authored by a former Vice President of the World Bank, Africa Region, Dr. Obiageli Ezekwesili; former president of the Nigerian Association of Energy Economics (NAEE), Prof. Adeola Adenikinju; Prof. Andrew Onyeanakwe of the University of Ibadan, and Mr. Bode Longe, an economist, explained that between 1970 and 2014, Nigeria benefitted from five oil booms but refused to use the huge revenues earned from these booms to expand the nation’s economic base.
The report, which was funded by the Nigeria Natural Resource Charter (NNRC) and the Shehu Musa Yar’Adua Foundation, stated that Nigeria’s failure to manage these oil prosperity cycles has delayed her economic rise.
“Despite being the largest producer and exporter of petroleum in Africa and one of the 10 largest producers in the world, Nigeria has failed to transform decades of oil earnings into sustainable development” the researched report stated.
“In the period spanning 1970 to 2014, Nigeria wasted five oil booms – earning a conservative estimate of a trillion dollars in oil revenue but making no significant savings. These earnings have also not translated to lasting or productive capital through human development, infrastructure and institution building.
”Nigeria’s failure to effectively manage revenue earned from oil and gas has delayed the country’s transition from a developing economy to an advanced one.”
The report, which was made available to our reporter also drew a nexus between oil price boom and bust to the country’s unemployment rates, stating that each oil price boom brought about some reduction in national unemployment rates, while a bust contributed to increases in unemployment levels in the country.
The 37-page report added, “The volatility and unpredictability of oil prices over the years has made oil revenues difficult to manage. Sharp swings in prices distort the economic growth of oil revenue dependent economies, with ripple effects on budget deficits and fiscal planning.
It revealed that the Obasanjo Administration’s economic reforms of 2003 to 2007 represented the first attempt to break the pattern through innovation of a savings mechanism known as the Excess Crude Account (ECA) into which extra revenue from oil was warehoused for ‘rainy day expenditures’.
The report said the ECA proved so successful that at the end of that administration in 2007, it had accumulated $17 billion, despite paying the Paris Club $12.4 billion in exchange for the remainder of its $30 billion official debts being written off, stating however that the tempo of the accumulation of savings was not sustained by successive administrations.
It further stated that the governments that succeeded that of Obasanjo did not take advantage of the ECA and so lost the chance at growing the country’s foreign reserves to as much as $100 billion dollars, and ECA level to at least $40 billion, even though there was a six-year record of high oil prices.
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