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Rwanda’s smart pathway to meet prosperity goal by Keith Hansen

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Rwanda, a small country nestled amongst a thousand green undulating hills, has been taking a cue from the rich nature that surrounds and sustains it.

Although its contribution to global greenhouse gas emissions is negligible, its vulnerability to climate change shocks risks stifling the remarkable economic and social progress the country has achieved in the past decade.

The consequences of extreme natural disasters, including frequent floods and droughts, dampen Rwanda’s prospects for sustainable growth. They also delay the government’s ambitious plans to improve the health and livelihoods of Rwandans.

A new diagnostic report from the World Bank, the Country Climate and Development Report (CCDR) for Rwanda, estimates that if no action is taken to address climate change, GDP would be around two percent lower on average through 2050 than it would be in a world without climate change, with similar reductions in levels of household consumption, exports, and government revenue.

Mainstreaming actions

Rwanda has been at the region’s forefront when it comes to putting climate at the centre of its development. The government has made concerted efforts to mainstream climate action into its strategies in order to significantly reduce greenhouse gas emissions and enhance adaptation — all while fostering a better, more prosperous, and more resilient future for its people.

It’s 2020 Nationally Determined Contribution (NDC) outlines critical climate mitigation and adaptation measures needed to support the country’s low carbon and resilient national development ambitions.

The CCDR for Rwanda presents pathways that Rwanda could consider achieving its Vision 2050 and national strategies for transformation, green growth, and climate resilience — while prioritising actions that will enhance the impact of NDC investments and deepen the commitment to green economic and social transformation.

The cost of implementing actions in the 2020 NDC is high — the Government estimates it at $11 billion, or to spend 8.8 percent of the GDP each year through 2030.

Thus, the biggest hurdle Rwanda faces in implementing its innovative, green, inclusive, responsive, and growth-oriented development pathway is finding resources to finance these plans and strategies.

It is a challenge that affects a majority of countries in the region at a time when global climate action is stalling amid multiple crises — the conflict in Ukraine, Covid-19, surging inflation, and reversals in development.

The CCDR suggests a mix of resources: the government’s own, development partners, and the private sector to help balance the costs and risks. Therefore, one of the most urgent actions the government can take is to develop a climate-smart, private sector-friendly investment environment that helps balance investment projects with policy reforms and encourages the development of a green finance market.

The private sector and private investment have crucial roles to play in helping Rwanda achieve its climate and development goals. The CCDR explores how Rwanda could best engage the private sector across its economy, including agriculture, infrastructure, and urban development.

For example, blended finance can reduce perceived risks by investors looking to enter new markets, and eventually demonstrate the business case for sustainable private sector investment in the sector and the country.

These kinds of solutions are needed to scale up investments in human and natural capital, but also in water infrastructure and management, conservation agriculture, and sustainable forestry to mitigate emissions from, agriculture and land use.

Blended finance

At COP27, Rwanda will unveil its plans to launch Ireme Invest, a facility for private-sector green investments that will crowd in private-sector investment. Ireme Invest is a green investment facility that will support the private sector to access green finance and increase the private sector’s contribution to Rwanda’s response.

The facility will catalyse green and low-carbon private investment with a focus on blended finance.

 

Keith Hansen is the World Bank Country Director for Rwanda, Uganda, Kenya, and Somalia, and Rolande Pryce is, World Bank Country Manager for Rwanda

Strictly Personal

Dangote Refinery: A timely win for industrialisation, By Abiodun Alade

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Nigeria, rich in resources and with a burgeoning young population, remains paradoxically stagnant due to its over-reliance on imports. This dependency, rather than being a temporary measure, has entrenched itself as a systemic barrier to long-term prosperity.

With a population exceeding 200 million and a predominantly young demographic, Nigeria has become a prime target for global product dumping. Each year, a flood of new products enters the Nigerian market, to the point where the country imports nearly everything imaginable. This has created a mindset where locally produced goods are often perceived as inferior compared to imported items.

As one writer aptly observes, Nigeria imports toothpicks despite having bamboo, starch even though it is the world’s largest cassava producer, and tomatoes while having its own tomato production base. For nearly thirty years, Nigeria relied on imported refined petroleum products despite being a major crude oil producer with four refineries.

However, this narrative changed a few days ago with the production of gasoline (petrol) from the Dangote Petroleum Refinery and Petrochemicals, owned by Africa’s wealthiest entrepreneur, Aliko Dangote. This landmark facility, recognised as the world’s largest single-train refinery with a capacity of 650,000 barrels per day, also produces diesel, aviation fuel, and other products.

This marks a significant victory for industrialisation in Nigeria and serves as a powerful example of how Africa can break free from the cycle of being a dumping ground for foreign goods. It is striking to note that only Algeria and Libya out of the 54 countries in Africa do not import fuel, highlighting the transformative impact of this development.

By harnessing Africa’s abundant crude oil resources to produce refined products locally, Dangote aims to catalyse a virtuous cycle of industrial development, job creation, and economic prosperity.

In Nigeria, the refinery will significantly reduce fuel imports, save foreign exchange, and contribute to stabilising the naira, lowering inflation, and reducing the cost of living, among others. The refinery would lead to the protection of forex revenue of around $20bn a year at current market prices and savings of $14bn a year through domestic supplies of petroleum products. It would also create a minimum of 100,000 indirect jobs through retail outlets and ease the availability of petroleum products in the country.

Beyond its role in petroleum refining, the Dangote Refinery also represents a significant boost to Nigeria’s industrial and manufacturing sectors. It will produce crucial petrochemicals such as polypropylene, polyethylene, base oil, and linear alkylbenzenes that will grow in many sectors, including the agricultural sector.

Previously, some players in the packaging industry had to shut down due to the difficulty in accessing foreign exchange to import polypropylene. This issue is expected to become a thing of the past, as Dangote proudly declared on Tuesday: “We are committed to ensuring that starting in October, there will be no need to import polypropylene. Our petrochemical plant will be fully capable of meeting all local demands.”

The availability of these raw materials is set to revive related sectors and industries that had nearly vanished due to the prohibitive costs of importation. While importation provides immediate, short-term gains, it rarely supports sustainable growth. In contrast, industrialisation fosters long-term economic development by creating jobs, boosting productivity, driving innovation, and improving infrastructure.

In recent years, the impact of substandard fuel imports has been catastrophic. In 2022, poor-quality fuels damaged vehicles, generators, and machinery, leading to health crises, including cancer cases. The halt of these imports, achieved through interventions from Belgium and the Netherlands, is only a temporary reprieve as new routes for these harmful products were found, thereby continuing to inflict damage on Nigerians.

However, Nigerians can now breathe a sigh of relief, as the Dangote Oil Refinery will deliver refined products meeting the Euro-V standard, the highest quality in fuel. This level of excellence would have been unattainable through importation; under such circumstances, the best available would likely remain subpar.

As Nigeria contemplates her future, the lessons from industrialised nations are instructive. Nations like China, Japan, Taiwan, and South Korea have experienced significant growth through industrialisation. These nations have demonstrated that investing in and protecting domestic industries, rather than reliance on imports, is a pathway to sustained development and global competitiveness.

The transition from a trading company focused on importing bulk commodities to a diversified conglomerate over the last two decades has enabled Dangote Industries Limited to significantly boost the economy and champion Africa’s drive for self-sufficiency. This evolution illustrates a vision that other stakeholders, including the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), should consider.

I was concerned when DAPPMAN, in a letter to President Bola Tinubu, expressed worries about financial losses incurred by its members due to Dangote Refinery’s decision to reduce the price of automotive gas oil (diesel) from N1,700 to N900 upon starting production in January. The association said that players in the downstream petroleum sector have invested over N3 trillion in establishing around 130 private petroleum depots. Such an amount could turn around some manufacturing sectors instead of serving as infrastructure for importation.

I believe that DAPPMAN and other Nigerians should mobilise resources to support the government in developing the manufacturing sectors of the economy. This is the most effective way to accelerate Nigeria’s development, reduce unemployment, and address insecurity.

Nigeria’s path to progress lies in embracing industrialisation. By investing in local industries and fostering a climate conducive to growth, Nigeria can unlock its potential and secure a prosperous future for its citizens. The time has come to shift from a reliance on imports to a focus on nurturing and expanding domestic industries. This transformation is not only feasible but essential for Nigeria’s development.

 

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Strictly Personal

Where is Deus Soka? And who’s disappearing all these people? By Jenerali Ulimwengi

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There must be someone somewhere trying to make sense of what is happening around us these days.

You only have to take into consideration a number of things going on here to realise that there is a jinx going round in our country and we are increasingly becoming unable to put our affairs on rails whose destination we can hope to at least guess.

Let us look into one of the issues that has come to dominate the news cycles of Tanzania, at least the social media cycles, since the so-called mainstream media seems to have been effectively neutered.

Take the case of a certain young man by the name of Deus Soka, who has apparently gone missing for about a month now.

I understand this is a young man in his twenties who, in these past few weeks, has become a reminder of what many Tanzanians have come to dread: the phenomenon of people just disappearing from wherever they are supposed to be, and there being no proper information regarding them.

Now, the “Soka” story has a particular context. A short while ago, a prominent, and audible lawyer, Mwabukusi, took over the leadership of the national Bar associalition — the Tanganyika Law Society, TLS — and upon assuming that office showed what he was intending to do with his new responsibilities at the help of the Bar.

Mwabukusi made it clear he was not going to mince words in matters where he believes he has the right, and duty, to speak out against such as the rampant human rights abuses committed in the country, mainy by the authorities, and that he was willing to call out anyone worth calling out on these cases which are becoming more and more common in the country.

Mwabukusi publicly read more than 80 names of individuals who had gone missing and whose families, colleagues and friends were clamouring for.

There has been little indication that the authorities are even bothered about these reports, and the few statements made by those who should be doing something generally show a nonchalant attitude to the whole thing. It is as if it is unimportant.

It becomes even more complex when it is easy to not have a focus of where we need to direct our efforts with the view to understanding just what is happening to us.

We could easily say that these events are being orchestrated by the authorities’ desire to control the political trends during these upcoming elections at local government level, and the general elections next year.

That line might be credible, because it is clear that President Samia and her party are hell-bent on winning this year’s local elections and next year’s general elections, and it looks like the whole government machinery is willing to bend over backwards to do her bidding, and if that means a few people being deprived of their freedom, it may not seem like a big matter to some people in their offices.

Recently we saw what the authorities were willing to do against the Maasai in Arusha, and people in authority let matters be, until the Maasai staged a very visible demonstration that went around the world in pictures taken by the very tourists whose trips had been disrupted by the picketing Maasai, before Samia sent in her ministers to “assure” the Maasai that their grievances would be taken on board.

Despite the “assurances” there can be no guarantee that these will be honoured, simply because we have run out of honest brokers.

In this very case of the Maasai, something funny happened when some smart aleck contrived to have a case opened in a local court in Arusha, purporting to support the Maasai in their claims against their eviction, and apparently the case was “won” by the Maasai, only for it to become clear that the person in whose name the case was filed, did not even know about the case!

This was an interesting case — even if apparently fictitious — because the swiftness with which the case was expedited showed that the slow wheels of justice can sometimes acquire wings to effect decisions desired by those in authority! In such circumstances, who can have faith in whatever is being said by the people in power, when it looks like they could never tell the truth to save their own lives?

Back to the Soka issue, one hopes this young man is still alive somewhere, but it could be only a pious hope.

More than five years ago, another young man — his name was Ben Saanane — went missing after he had publicly accused President John Magufuli of misconduct regarding his PhD. The man has not been heard of to this day, presumed dead.

Could this also be the fate of the young man Soka, someone about whom there has been so much concern expressed, and about whom the authorities have kept an ear-shattering silence?

In another case, one Twaha Kombo went missing, and after 29 days the police eventually admitted they had him: his relatives found him badly beaten.

I have the duty to bring these matters to the attention of the world, especially because there are people out there who can not believe that the Tanzanian government is capable of these atrocities. Well, it is.

Ulimwengu is now on YouTube via jeneralionline tv. E-mail: jenerali@gmail.com

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