This is as he said that a slight reduction in the customs
procedures could drive up Nigeria and other members’ revenues by at least
$250bn.
Osinbajo stated this on Wednesday in a message delivered at
the closing of the 2021 Conference of African Insurance Practitioners, themed
‘Rebuilding Africa’s economy: An insurance perspective’.
Senior Special Assistant to the Vice President on Media and Publicity,
Laolu Akande, disclosed this in a statement titled, ‘Monumental challenges,
great opportunities ahead of Africa next decade- Osinbajo’.
Urging African insurance practitioners to leverage
opportunities in the AfCFTA, the Vice President said, “Every smart economic
grouping, whether governments or businesses, must be thinking, planning and
strategising for these new times.
“The free trade agreement presents a major opportunity for
African countries. By some estimates, if we get it right, we can bring several
million out of extreme poverty and raise the incomes of 68 million others who
live on less than $5.50 per day.
“There are potential income gains of up to $450bn, and just
cutting red tape and simplifying customs procedures alone could drive up to $250bn
of that sum.
“So, what does all this mean for the insurance industry in
Africa? Well, plenty of opportunities. More trade in goods will mean a greater
need for insurance services, brokers, in particular, should expect a boom;
demand for trade facilitation services will rise, but companies that already
have market presence in other African countries, even if by collaboration, will
benefit more than others.”
On climate change, Osinbajo probed, “how is the African
insurance industry preparing for the interesting days ahead?”
He referenced a Mackenzie podcast transcript, describing it
as eye-opening.
He said, “Here in Nigeria, the growing intensity of flooding
and damage to vast agricultural acreages might have a knock-on effect on other
areas of the economy. Further slumps in the economy are bad for everyone, even
insurers.”
The Vice President added, “For Africa, there is perhaps a
more significant challenge. In the past two years, the wealthier countries,
after building their economies on fossil fuels, are now banning or restricting
public investments in fossil fuels, including gas.
“Seven European countries, including France, Germany, and
the United Kingdom, announced that they would halt public funding for certain
fossil fuel projects abroad.
“Also, the World Bank and other multilateral development
banks are being urged by some shareholders to do the same.
“The African Development Bank, for instance, is increasingly
unable to support large natural gas projects. Already, some OECD based
insurance companies are committing to reducing their commitments to
carbon-intensive industries by 2030.”
Explaining the implication of the trend on Africa’s growing
oil and gas markets, Osinbajo said, “I think African insurance companies must
now speak and act differently.
“You must be at the forefront of the campaign for a just and
equitable transition to a low carbon future. This means that we cannot accept a
defunding of gas projects when gas is an important transition fuel for us; not
just to get our people from the environmentally damaging firewood to cooking
gas, and also autogas for our auto vehicles, but to also provide much-needed
power for industries and domestic use.”
He added that Africa’s economic future might be at risk if
the continent did not insist that the necessary speed to zero emissions must
not mean disaster for African economies.