As humans, we engage in numerous activities involving water; from consuming its clean and purified form in our homes to harnessing its expansive bodies for global trade. About 80% of international goods traded are transported by sea, and this volume will quadruple by 2050. Still, we remain unaware of its limitless potential, especially in this part of the world – Nigeria.
Ever heard of a blue economy? It is the sustainable and responsible use of ocean and aquatic resources for economic growth, improved livelihoods, and environmental preservation. Fisheries, aquaculture, maritime transport, tourism, renewable energy from the ocean, biotechnology, and marine conservation are all subsectors of this economy.
The estimated value of the global ocean economy, according to the United Nations, ranges between $3 trillion to $6 trillion. The ‘blue economy’ is crucial for socio-economic development worldwide, and the UN has recognized it as the 14th Sustainable Development Goal. It’s relevant to all nations and can be implemented at different levels, locally and globally.
African countries like South Africa, Seychelles, and Mauritius are already vibrant players in this economy. Now Nigeria has taken a strategic step to bolster the growth of this economy which currently generates nearly $300 billion, and 49 million jobs on the continent. On Wednesday, 16th of August 2023, Nigeria established a dedicated ministry for this purpose, known as the Ministry of Marine and Blue Economy to unlock the potential of Nigeria’s vast marine resources, with leadership entrusted to Bunmi Tunji-Ojo.
For a long time, the Maritime Stakeholders Forum and industry experts have consistently advocated for a review of the enabling laws in the maritime sector to ignite the blue economy and bring it to life. The rationale behind this call is evident. Nigeria possesses enormous aquatic and marine resources with the potential for the growth of the blue economy. The country boasts a coastline of about 420 nautical miles and a sea area of about 84,000 square nautical miles which make up her coastal and offshore waters. But all the while, this natural gift has been underutilised.
The creation of this ministry bears importance across multiple dimensions, encompassing ecological and economic considerations. From an economic standpoint, the timing could not be more crucial, given Nigeria’s current state of economic peripeteia. The country is neck-deep in debt both to international and domestic creditors. Among its substantial debt burdens, the federal government presently owes its central bank a staggering N23.3 trillion. Furthermore, even amid declining revenue, Nigeria’s debt service-to-revenue ratio reached 80.6 per cent in 2022. Projections from KPMG indicate that this ratio could potentially exceed 100 per cent in 2023. If properly harnessed, this ministry could yield multiple avenues to boost Nigeria’s revenue.
One such avenue is climate refinancing, a process of repurposing existing funds or mobilising new investments to address climate change mitigation and adaptation efforts. Just last week, Gabon completed a $500 million debt-for-nature swap that helps to refinance a small portion of its debt and locked in funds for marine conservation. It is an interesting way of slightly reducing debt repayments and also generating money for conservation. By adopting this approach, Gabon anticipates freeing up $163 million to expand its safeguarded coastal regions and combat unlawful overfishing.
In a similar development last year, the former Vice President Yemi Osinbajo introduced a proposal for a debt-for-climate swap deal, aimed at alleviating Nigeria’s debt load while facilitating the country’s transition towards sustainable energy solutions. These instances of climate refinancing offer valuable models that could be emulated within the framework of the blue economy.
During a maritime symposium held in April, Mr Ademola Adegoroye, the Minister of State for Transport, revealed the government’s ambitious plan to procure 28 vessels at a cost of $700 million through the long-awaited Cabotage Vessel Financing Fund (CVFF). He emphasised the government’s commitment to facilitating smoother processes for ship-owners to acquire additional vessels, to grow the blue economy.
These strategic measures hold significant importance, considering the substantial economic losses Nigeria suffers due to its lack of a national carrier. The nation’s failure to establish a national carrier has resulted in a substantial yearly deficit of over $17 billion in freight fees paid to foreign shipping firms.
The ministry also presents a veritable ground for coastal tourism in Nigeria. Nigeria’s tourism sector has been non-vibrant for a long time. But various African countries like South Africa, Seychelles, and Mauritius have provided exemplary models for establishing and operating a blue economy. In Seychelles, a nation known for its abundant beaches, coral reefs, and natural preserves, tourism plays a pivotal role as a major contributor to its economy. Tourism accounts for a substantial 16.5% of its GDP.
Similarly, tourism is Mauritius’ biggest ocean export. The industry alone contributes about 30% to its GDP, 28% to total employment and 34% to export receipts. Having a ministry dedicated to the economy could help Nigeria become a vibrant player in the space.
However, the advantages extend beyond this horizon. From an ecological standpoint, in 2019, the country lost about 80 per cent of its fishing industry capacity to neighbouring countries in the Gulf of Guinea region due to several factors including the persistent threat of maritime security concerns, low policing of inland waters and constant pollution of waters. In the same year, the Africa Blue Economy Forum (ABEF) revealed that plastic pollution alone costs $13 billion annually in damages to marine ecosystems.
The blue economy ministry holds the potential to bring about significant positive changes in this scenario. By concentrating on the sustainable management of marine resources, promoting responsible fishing practices, and implementing effective waste management strategies, the ministry could significantly contribute to mitigating plastic pollution. This, in turn, could help reduce the economic losses associated with pollution.
Notably, the establishment of additional ministers and ministries has drawn criticism from individuals who have questioned the decision to create and modify ten ministries including the Ministry of Steel Development, Gas Resources, and Tourism, especially in the face of dwindling revenue, when the government’s focus should be on reducing the cost of governance.
But then, this critique finds some justification in the historical underperformance of certain ministries, which have served as conduits for corrupt politicians to divert funds intended for the national welfare. It is important to ensure that these departments, particularly those related to the marine and blue economy, do not continue with their usual practices.
