Monday 21st October 2019
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German support for climate adaptation in Nigeria

The Federal Republic of Germany, through its Ministry of Foreign Affairs, is providing funding support for two workshops on Climate Risk Insurance and Environmental and Social Impact Assessment – for the transition to a green economy in Nigeria. These forums are being facilitated by a Lagos-based non-governmental organisation, the Community Conservation and Development Initiatives (CCDI).

Flooded parts of Lokoja in Kogi State in 2012. One of the forums explored how far banks and insurance companies can include into their corporate strategies environmental sustainability commitments, responsibilities and initiatives that can contribute to climate resilience

Flooded parts of Lokoja in Kogi State in 2012. One of the forums explored how far banks and insurance companies can include into their corporate strategies environmental sustainability commitments, responsibilities and initiatives that can contribute to climate resilience

In 2015, CCDI organised a project under the Environmental Governance Programme of the Heinrich Böll Foundation Nigeria, Finance for Climate Resilience. The project was to generate knowledge on suitable financial tools to be used by the insurance and finance industry to ensure environmentally responsible investments by the private sector and to disseminate information to targeted stakeholders. The aims and objectives included finding out how far banks and insurance companies can include into their corporate strategies environmental sustainability commitments, responsibilities and initiatives that can contribute to climate resilience. A research analysis of sustainability initiatives available to guide the Nigerian financial sector was undertaken along with other activities with the insurance and banking sector.

The study was not able to identify any green insurance products being offered by Nigerian companies. Sub-Saharan Africa has a small share of the global insurance market but huge potentials and wide ranging opportunities for positive impacts exist.

The Bali Action Plan, which was agreed by Parties to the UNFCCC in Bali, Indonesia, in 2007 as the basis for developing a new international agreement on climate change, states that adaptation requires consideration of “risk management and risk reduction strategies, including risk sharing and transfer mechanisms such as insurance”, as well  as “disaster reduction strategies”.

 

Climate Risk Insurance

At this workshop on Climate Risk Insurance, held at the Westwood Hotel, Ikoyi, Lagos, on Thursday, 29th September, 2016, His Excellency, Ingo Herbert, German Consul-General in Lagos in his opening remarks, cited the good relations between Nigeria and Germany, and the willingness of his government to facilitate knowledge sharing in the area of climate change and ancillary sustainable development. The lead paper On Climate Risk Insurance – Experiences from other countries and their application to Nigeria, was presented by Thomas Wiechers, an economist from the German International Development Agency, GIZ, in Eschborn, a city near the financial metropolis of Frankfurt-am-Main.

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Contextually, some key considerations and questions emerged as areas of focused discussion at this first workshop on Climate Risk Insurance, after the presentations. For instance, if the nature of climate-induced risks and hazards in Nigeria, is primarily from hydro-meteorological hazards as stated in the presentation by Joseph Alozie, Director, Climate, at the Nigeria Meteorological Services (NIMET) in Abuja, the organisation bears nationwide responsibility for their authentication through early warning systems, research and documentation of scales in vulnerability and societal resilience to current weather patterns and variations, and to longer term projected climate change impacts.

The audience queried the nature of collaboration achieved by the different government agencies in Nigeria, such as NIMET, the environment and agriculture ministries, and their affiliated research institutes, as well as the National Emergency Management Agency (NEMA), and further how much they worked and exchanged information with the insurance and business sectors, farmers, forestry departments, environmental managers, and other related multiple stakeholders. Precisely, what forms of cohesion are envisaged in Nigeria between the public and private sectors in risk reduction and climate insurance, including the sharing of information? What international assistance and partnerships are expected in the process?

How can insurance-related mechanisms contribute to the fortification of resilience, particularly of low income groups to absorb loss and recover from disaster impacts in Nigeria? Who can get insured against climate-induced, environmental hazards? Specifically, which risk-transfer tools are compatible with Nigeria’s ecology, social geography and economy configuration? India practices a weather-based crop insurance scheme to protect farmers against drought.

What roles will be played by environmental and urban planning, climate and agricultural policy (federal and state governments), financial investments, education, engagement of the media and art, to raise awareness, individual behaviour and attitudes in the reduction of ecological footprint and disaster risks?

In addition, what specific role, if any, does climate risk insurance play in the transition to a green economy?

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In consideration of environmental ethics and corporate social responsibility, how does the Nigerian insurance industry see itself, considering that insurance is first and foremost a pure business: the more premium payments from clients attracted, the better? At the same time insurers want to minimise their risks of having to pay for the damages, and therefore will logically advocate at national and international level for an increased climate change adaptation and mitigation. Some risks from climate change may also be so high that the premium is not affordable (e.g. flood victims in Louisiana, USA where most of the houses had not been insured because of the huge insurance premium).

Will insurance help Nigeria reduce climate-induced risks? It appeared that this was not a question to be answered in one sentence, apart from assurances from the presenters that once the linkages between the management of ecological systems, agricultural and industrial expansion, and the intensification of infrastructure construction, demography, climate change vulnerability, insurance and poverty levels were recognised, expertise, knowledge and skills would grow in the country.

In Nigeria, the development of agriculture, forestry and fisheries sits within a system affected both by climate and the political economy, mostly because the farming system is rain-fed. A priority could be finding ways to develop climate information to improve farming practices. Nigeria can build up its resilience from early warning systems, but equally through development of better crop varieties adaptable to extreme climate variability.

Unclear remained the roles played by regulatory bodies in climate risk insurance, and why in Nigeria the most vulnerable are the least insurable?

 

Environmental and Social Impact Assessment

The second workshop supported by the German Ministry of Foreign Affairs is on Environmental and Social Impact Assessment (ESIA) in Nigeria. This event holds on the 1st November, 2016. Since becoming a sovereign nation in 1960, Nigeria has acceded to a series of multilateral environmental agreements, with little local commitment to translating conference paper-work and signatures into practicalities on the ground at home. According to the Food and Agriculture Organisation of the United Nations (FAO), Nigeria had the highest rate of deforestation in the world in 2005. The country is presently among the lowest power generation countries in the world, and surprisingly far lower than many African countries, despite a status as one of the world’s largest oil producers.

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In addition to ecologic and economic factors, the health indicators for Nigeria, scripted in National Strategic Health Development Plan (NSHDP) 2010-2015, are among the worst in the world. Nigeria shoulders 10% of the global disease burden. The life expectancy at birth is 47 years (National Demographic and Health Survey, NDHS). There are large variations of infant and child mortality across population sub-groups. In addition to impacts on our natural resource base, Nigerians may experience increased exposure to infectious diseases and water- and food-borne illness, according to the then Minister of Environment (December 2011), Hadiza Ibrahim Mailafia, within the  National Plan of Action on Climate Change for Nigeria (NASPA-CCN) 2012.

President Buhari’s signing of the Paris Agreement recently, on 22nd September, 2016, and his declaration that the impacts of climate change would be reversed in Nigeria, suggest that the nation’s economic growth must henceforth be driven by a suite of policies and governance mechanisms targeted at reducing carbon and ecological footprints. In principle, a low carbon economy appears to be desirable, but how exactly will Nigeria go about it, particularly as a comprehensive government blueprint of sequential plans of action on the subject is still non-existent? This perspective makes it difficult to re-invigorate international commitments on multilateral environmental and climate change agreements at the national level.

Are Nigerian businesses and their supportive banks, for example, committed to any forms of corporate environmental and social responsibilities? Do financial houses demand transparent and impeccable environmental and social impact assessments prior to making loans and other forms of financial support available to those construction companies clearing forests, draining wetlands and dredging coastal marine ecosystems?  Green economies need green forests. Who will clean up the lagoon at Lagos? The diffuse themes of this workshop are therefore coalesced and encapsulated in the simple question: How will environmental and social impact assessments, and ancillary land use regulations in Nigeria deliver the climate compatible development of a green economy? It raises wide but fundamental questions of baseline and situation analysis, innovations, projections and needs assessments; what has been, and what should be; diagnostic guidance and prognostic philosophy.

By Ako Amadi, CCDI

One comment

  1. Many thanks to the German government and people for investing in the future of Nigeria and Africa.

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