News Type: News

WAMU-Securities advocates broadening the investor base

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Dakar is a city in the throes of change. The capital hosted the second edition of the Public Securities Market Meeting held from Jan 24 – Jan 26.

The forum focused on the issues and challenges of the regional sovereign debt market with the aim to position the market as a real investment option.

To this end, WAMU-Securities and other financial market players are advocating for an expansion of public securities to new investors.

“We need to rely more on our market, especially since external markets are almost closed,” Banassi Ouattara, the acting deputy general director of Waemu started right off.

“The Eurobond markets are closed because of the policies of the central banks which are forced to implement; with inflation galloping around the world. So, there is this need to broaden the investor base and the broadening of the investor base also contributes to the efficiency of the market because it will result in the expression of different strategies. This means that the more investors we have, at the same time as some buy securities, others will want to sell, so there will be a lot of trading in the market.”

Facilitating the financing of local economies

The forum saw three days of exchanges on the theme “Investor Diversity and the Efficiency of the Public Securities Market.” Basically, on how to facilitate the financing of local economies, something major players say requires a paradigm shift particularly for financial inclusion.

“Unfortunately, even though the financial market was created in 1998, it has yet to be demystified and no longer frightens certain investors in the various segments of the population,” Harold Coffi, the general director of financial services company at Societé Générale Senegal analyzed.

“I think that everyone has a role to play: experts, SGI, SGO, etc. There are also the banking networks since we have access to a large population that can easily adhere to these products. But there is also, in terms of financial inclusion, the much lower income, unbanked population. That’s where OME, so the Telco’s can also help.”

“I think it’s the combination of all of that, strong partnerships that will allow us to have a broad base of collecting the savings that exist in Africa much more effectively,” Coffi concluded.

Financial markets do remain indispensable in this quest to boost economies. WAMU-Securities, for example, facilitates contacts between governments and investors.

Moreover, one of the highlights of the Public Securities Market Meetings is the Country Focus. This is a forum for sharing experiences but also for presenting progress made and development projects to attract investors. A great opportunity for countries like Burkina Fasoa according to Aminata Ouedraogo, the Burkinabe deputy director of the public treasury.

“For us, it is very significant because we started the year 2023 with a program of issues. It was an opportunity for us first to reassure investors to accompany us and also to share our issuance program. So, for us, this is a framework that we need to perpetuate. We will return to normal conditions very soon. We especially ask investors to be with us always.

WAEMU, a zone full of potential

Today, the WAEMU zone offers guarantees: enormous economic potential, reassuring growth prospects despite the global and internal crises. This is reassuring for investors like FSD Africa, an institutional partner of WAMU-Securities. Funded by the British government, this specialized development agency works to build and strengthen financial markets in Sub-Saharan Africa.

“Our presence here in Dakar will serve to increase our network. It will also increase the number of institutional partnerships that we can have. We have the opportunity to invest directly in companies. We also offer technical assistance to companies and governments on the continent. And I think that our presence will allow us to show all the financial instruments that we offer”.

Because of the crises that make access to international markets increasingly difficult, governments are forced to adapt. Financial market players have understood that economic sovereignty requires a broader investor base. For WAMU-Securities, domestic markets remain a more than credible alternative for making national and community economies more attractive.

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The potential of Africa’s mobile and digital ecosystem

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Yesterday, the UK’s international trade department hosted the Africa Mobile & Digital Leaders Reception. The event, which was hosted on the sidelines of the Mobile World Congress in Barcelona, is the third in a series of events looking at promoting partnerships between the UK and Africa, specifically in mobile-driven digital trade.

Digital trade is a driver of business growth all over the world. Market research company, eMarketer, predicts that online sales will soar from $3.3 trillion 2019 to $6.2 trillion in 2023 and $7.4 trillion by 2025. In Africa, the United Nations estimates that internet business could add $180 billion to the continent’s GDP. However, there are hurdles that need to be overcome to unlock the immense opportunity for mobile-driven digital trade on the continent.

Jamila Saidi, Head of Digital Commerce at the trade department said, “We know that digital trade and digital services powered through mobile and other channels is the future and will be at the heart of growth in Africa. The continent is one of the most exciting in entrepreneurship and innovation and this century will redefine Africa as its population claims the opportunity ahead and reaches for economic empowerment, all powered by entrepreneurship and investment.”

The Department is cooperating with African Business magazine to highlight how Africa’s vibrant and entrepreneurial tech community can leverage partnerships to overcome hurdles to unlocking the potential of digital trade in the continent.

The event also saw the announcement of a new business group, The Africa Forum for Digital Commerce, which will bring together people and organisations who are passionate about advancing Africa’s economic growth, to collaborate and create digital commerce opportunities from the continent and to the continent. The forum’s founding members include ARM (E3)NGAGE which has recently been launching its own digitisation initiatives across the continent.


(From left to right) – Stephen Ozoigbo, Senior Director, Emerging Economies, Arm; Henry Bonsu, African Business magazine; Dr Robert Ochola, CEO, AfricaNenda

Stephen Ozoigbo, Snr. Director, Emerging Economies at Arm, said, “Since the inception of our (E³)NGAGE lab model, we have seen tremendous progress across targeted program areas that support our digitization strategies across the continent. Our current ecosystem successes in Africa have also accelerated Arm’s ambitions around launching additional labs, as we expand across the continent.”

Other founding members include:

  • AfricaNenda – an independent, African-led organisation created to accelerate the growth of instant and inclusive payment systems.
  • Connected Places Catapult – the UK’s innovation accelerator for cities, transport, and place leadership. The Catapult has an established track record of working with cities across Africa and around the world on initiatives designed to solve pressing challenges in rapidly growing cities, such as congestion and overcrowded public transport.
  • Vodafone – The largest pan-European and African technology communications company, Vodafone operates mobile and fixed networks in 20 countries, and partners with mobile networks in 47 more. Vodafone has over 330 million mobile customers, more than 28 million fixed broadband customers, and 21 million TV customers. Vodafone is also a world leader on the Internet of Things (IoT), connecting over 155 million devices and platforms.  Vodafone has revolutionised fintech in Africa through M-Pesa, the region’s largest fintech platform, providing access to financial services for more than 58 million people in a secure, affordable, and convenient way.
  • what3words – a British founded tech company that has created a simple way to communicate precise locations. It has divided the globe into a grid of 3m x 3m squares, and assigned each one a unique combination of three words: a what3words address. This allows users to find, share and navigate to any precise location using three simple words. The innovative location technology is used by businesses and governments worldwide to solve issues caused by poor addressing – improving efficiencies, enhancing customer experiences, offering smoother journeys and even saving lives.

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Niger’s National Adaptation Plan presents its path to climate resilience

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March 2023 – Recognizing that climate change is one of the key stressors of food insecurity and poverty, the Government of Niger set forth institutional arrangements to develop a National Adaptation Plan (NAP) to ensure resilience to climate impacts.

Niger started building the foundations of its NAP in May 2014, with support the National Adaptation Plan Global Support Programme (NAP-GSP) with funding from the Global Environment Facility. With the NAP-GSP, Niger began stocktaking existing frameworks and policies and identifying priority areas for adaptation interventions. By December 2017, Niger’s project proposal for “Advancing medium and long-term adaptation planning and budgeting in Niger” was approved the Green Climate Fund (GCF).

Niger’s NAP project has been delivered in synergy with other initiatives in the country. It supported the National Disaster Risk Prevention and Management Facility to integrate climate change into its strategy, and the development of the nationally determined contribution (NDC) through gender studies and climate scenarios.

With support from UNDP, Niger’s formulated and finalized a National Adaptation Plan that was submitted to the UNFCCC on 14 November 2022. The NAP outlines 25 adaptation options and prioritized five sectors (livestock, health, transport, forestry and wetlands). These sectors are intrinsically linked to the population’s food security, economy, development and well-being.

Adapting the livestock

When precipitation levels drop, animal fodder becomes unavailable which causes price inflation and impacts animal health and meat production. Such climate variabilities pose a serious threat to the national economy, increase pressures on pastoral ecosystems and consequently, soil erosion on a mass scale, which ultimately threatens livelihoods. Niger’s NAP outlines a plan of action for livestock, one of the five main sectors, which consists in developing pastoral areas and enhance animal feed banks. Priority will go towards promoting peri-urban livestock, including non-conventional livestock and the application of animal biotechnologies, such as AI and cryopreservation. Additionally, it will provide greater access to agro-meteorological information and build capacity of breeders.

Protecting wetlands and water resources

Water resources, such as wetlands, play an important role in feeding the population and livestock sector and are also strongly impacted by climate change. They also impact the road infrastructure, irrigation and agriculture production. Groundwater resources result from hydrogeological characteristics of each aquifer, in particular the mode and conditions of which it recharges. Despite this potential, Niger faces barriers of mobilization, accessibility and optimization of resources available.

Climate change and health

The current climate shocks and future climate projections have been analyzed through a study on health in Niger and focused on several health risks, including malaria, measles, meningitis, malnutrition, respiratory infections, cardiovascular disease and mortality. Niger’s NAP highlights the main impact to public health results from heat waves, increased temperatures and changes to precipitation levels. The NAP outlines actions to raise public awareness and train medical staff and health personnel to take climatic diseases into account and be educated on the differentiated needs of men and women.

Strengthening the resilience of women

Niger’s NAP also puts a strong emphasis on gender considerations in its NAP. For example, animal husbandry is one of the easiest ways to strengthen the resilience of a household as the animals can be a form of savings and can be sold to satisfy urgent financial needs. In Niger, women only own 28 percent of cattle, which underscores an inequality between genders in the livestock sector. Following sociological field studies, the results showed that in certain localities, some animals are automatically declared as part of the man’s heritage when in fact, even when they actually belong to the woman.

The NAP provides a course of action to improve the resilience capacity of members of women’s associations through the implementation of income-generating activities. The country will develop adaptation technologies that consider the conditions of the women’s associations based on traditional knowledge and work to strengthen the entrepreneurial skills of women and young people.

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Finance Is Failing the World’s Best Defense Against Climate Change

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Gabon is sometimes described as a “giant broccoli,” and from 3,500 feet up, it’s easy to see why. During a two-hour flight from the capital, Libreville, to a cattle ranch in the southernmost province of Nyanga, the land below is a nearly unbroken stretch of textured green carpet, one of the world’s largest intact rainforests.

These trees are Gabon’s superstars. They absorb and store millions of tons of earth-warming carbon dioxide each year, a critical function for the global fight against climate change. They also fuel the country’s timber industry, a major focus of economic development during the past decade.

In today’s financial markets, Gabon’s trees are worth more dead than alive. Despite the billions pledged worldwide to fight climate change, little has been distributed as compensation for the global benefit that trees provide. In 2021, Gabon received its first payment for reducing forest-related emissions—$17 million via the Central African Forest Initiative.

The timber industry, on the other hand, contributes about $1 billion to Gabon’s annual gross domestic product. It could be a great deal more. Unlike some of its neighbors, the country strictly limits logging, palm oil production and other activities that lead to forest destruction; it’s suffered less than 1% forest loss since 1990, compared with about 14% for continental Africa.

Now that oil production, the country’s primary source of revenue, is dwindling, leaders are reevaluating the money-making potential of the forests. Opening more land to timber companies is one option, but for now Gabon’s environmentally minded government is more interested in keeping the trees alive—if the international financial markets can make it worthwhile.

The best avenue for that, Gabon says, is the $2 billion-and-growing market for “carbon offsets.” That’s traditionally been limited to those who can document improvement on past environmental practices, not those who, like Gabon, never wrecked their forests in the first place. That’s because for a carbon offset to fulfill its function of compensating for its buyer’s emissions, it needs to have financed something that wouldn’t have happened otherwise. But in Gabon, forest protection has been happening anyway.

A boat transporting logs passes bay an oil rig in the Cape Lopez bay in Port-Gentil on October 14, 2022.
Men work on oil pipeline near Gamba on October 12, 2022.
Pipes near crude oil processing facilities in Gamba on October 12, 2022.
Unlike some of its neighbors, Gabon has put strict limits on logging. But with oil production—the country’s primary source of revenue—dwindling, leaders are reevaluating the money-making potential of the forests. Photographer: Guillem Sartorio/Bloomberg

Still, Gabon insists it should be compensated for the air-purifying service its trees provide. Otherwise, it hints, its commitment to forest preservation may take a backseat to more traditional economic development. In its recent national action plan under the Paris Agreement, the global climate pact, the country says it plans to remain a “net-carbon absorber”—if it gets access to international finance through a carbon market.

“There is no financial instrument to support Gabon to continue to offer this critical ecosystem service,” Akim Daouda, the chief executive officer of Gabon’s $1.9 billion sovereign wealth fund, said in an interview during a recent trip to London. “Can we monetize the forest and keep it for the rest of the planet? Or do we need to find a way to respond to the needs of our population?”

An excavator moves a log in a forest clearance concession managed by African Equatorial Hardwoods (AEH), a new forestry and timber processing company managing more than 420,000 hectares of forestry concessions, in Mayumba on October 11, 2022.
Forest clearance where logs are stored before transportation at a concession managed by African Equatorial Hardwoods (AEH), a new forestry and timber processing company managing more than 420,000 hectares of forestry concessions, in Mayumba on October 11, 2022.
A worker operates a machine at a timber processing plant managed by African Equatorial Hardwoods (AEH) in Port-Gentil on October 14, 2022.
Men work at a processing plant managed by African Equatorial Hardwoods (AEH) in Mayumba on October 11, 2022.
Men work at a processing plant managed by African Equatorial Hardwoods (AEH) in Mayumba on October 11, 2022.
Men work at a timber processing plant managed by African Equatorial Hardwoods (AEH) in Port-Gentil on October 14, 2022.
Gabon’s timber industry has been a major focus of economic development in the last decade, contributing as much as $1 billion to Gabon’s annual gross domestic product. Photographer: Guillem Sartorio/Bloomberg

Gabon’s per capita GDP is the highest on the continent, but there’s little evidence of wealth past or present in Nyanga. One of the few local health centers lacks running water, exposed wires poke out of the walls, and bare mattresses cover four, cast-iron bedframes.

The province is home to a 100,000 hectare (247,000 acre) cattle ranch, part of the Grande Mayumba project. A flagship of Gabon’s “sustainable development” efforts and backed by investments from the family offices of the Westons, Fricks and Sarikhanis, Grande Mayumba’s plans include logging, cattle farming and eco-tourism, as well as an area 37 times the size of Manhattan set aside for conservation.

The ranch raises N’Dama, a small chestnut-colored breed of indigenous beef cattle that tolerate tsetse flies and the sleeping sickness they carry. The 4,000-strong herd will grow and eventually roam alongside wild buffalo and antelope. The free-range model will minimize harm to the savannah ecosystem, and careful grasslands management could boost the soil’s carbon stock, according to Africa Conservation Development Corp., Grande Mayumba’s parent company.

The ranch isn’t profitable yet. So far, only Grande Mayumba’s logging operation is fully operational. The rest has moved far more slowly. To raise the money needed to really get the project off the ground, ACDG will need to issue and sell carbon credits.

Men load cattle into a truck at Nyanga ranch, comprising 100,000 hectares of savannah together with 4,000 head of Ndama and other mixed breed cattle on October 10, 2022.
Cattle can be seen gathered in a facility at Nyanga ranch, comprising 100,000 hectares of savannah together with 4,000 head of Ndama and other mixed breed cattle on October 10, 2022.
The Nyanga ranch raises N’Dama, a small chestnut-colored breed of indigenous beef cattle that tolerate tsetse flies and the sleeping sickness they carry. Photographer: Guillem Sartorio/Bloomberg

The forest-based carbon offsets on the market today tend to be based on projects that seek to avoid emissions or increase carbon storage. Limiting deforestation usually qualifies; so could planting trees. Developers usually calculate how the forests fared under their control compared with a historical baseline, then sell the difference in units of extra tons of carbon removed or avoided as offsets.

But because Gabon already has stringent restrictions on logging and there’s little deforestation to speak of, ACDG has had to take a different approach. Based on trends in more than a dozen once-highly forested countries, it contends there’s an imminent threat to the trees in Nyanga. Pending government approval, ACDG will sell credits based on how Grande Mayumba’s activities avert that hypothetical future destruction.

“There will be development in the Grande Mayumba area over time,” said Rob Morley, science and environmental planning director at ACDG. “This will either be unsustainable, unplanned and that will lead to a large amount of forest loss, or it will be planned.”

Sunset at Nyanga ranch, comprising 100,000 hectares of savannah together with 4,000 head of Ndama and other mixed breed cattle on October 9, 2022.
Pupils rise their hands to answer a question at the local school at Nyanga ranch, on October 10, 2022.
Men does repairs on a bulding that accommodates workers at Nyanga ranch, on October 10, 2022.
Sunset at the Nyanga river on October 9, 2022.
Gabon’s per capita GDP ranks among Africa’s highest, but there’s little evidence of wealth past or present in Nyanga. Photographer: Guillem Sartorio/Bloomberg

On the ground, the threat feels distant. About the size of Israel, the province is Gabon’s poorest, with just three paved roads, two hospitals and few public services. Residents have gone looking for better opportunities in Gabon’s main cities, leaving a population of around 53,000.

The Grande Mayumba project says it will generate as many as 4,000 jobs, mirroring President Ali Bongo’s Gabon Émergent, the country’s three-pillar development strategy based on industry, the environment and a services economy. Most will work in forestry or ranching, but a handful will staff a luxury ecolodge under construction in neighboring Ogooué-Maritime province. For $2,000 per night or so, well-heeled tourists will be able to see hippos frolic in the surf and ghost crabs dash in and out of the waves.

When ACDG figures out how to stabilize a runway on the sandy soils, guests will be able to access the lodge by plane. Until then, it’s a half-day journey from the nearest main town, by car, river barge and speedboat. The last leg is by quadbike along a strip of beach frequented by buffalo and the odd elephant, tide permitting.

Aerial view from Petit Loango, a 20-bed eco-lodge under construction at Petit Loango on the coastline of Gabon’s flagship Loango National Park on October 12, 2022. Based around the forestLAB research centre based at Petit Loango, the lodge aims to set a benchmark for nature-based tourism in Equatorial Africa.
Men work in the construction of a back-of-house infrastructure that will accomodate staff at Petit Loango, a 20-bed eco-lodge under construction at Petit Loango on the coastline of Gabon’s flagship Loango National Park on October 12, 2022. Based around the forestLAB research centre based at Petit Loango, the lodge aims to set a benchmark for nature-based tourism in Equatorial Africa.
A man stands in front of the 1km airstrip under construction at a 20-bed eco-lodge under construction at Petit Loango on the coastline of Gabon’s flagship Loango National Park on October 12, 2022. Based around the forestLAB research centre based at Petit Loango, the lodge aims to set a benchmark for nature-based tourism in Equatorial Africa.
Plans of the construction of the Petit Loango, a 20-bed eco-lodge under construction at Petit Loango on the coastline of Gabon’s flagship Loango National Park on October 12, 2022. Based around the forestLAB research centre based at Petit Loango, the lodge aims to set a benchmark for nature-based tourism in Equatorial Africa.
Africa Conservation Development Corp, Grande Mayumba’s parent company, is constructing a luxury ecolodge in neighboring Ogooué-Maritime province. For $2,000 per night, it will welcome well-heeled tourists eager to see hippos frolic in the surf and ghost crabs dashing in and out of the waves. When ACDG figures out how to stabilize a runway on the sandy soils, guests will be able access the lodge by plane. Photographer: Guillem Sartorio/Bloomberg

In its original plans, Grande Mayumba expected its model to generate as many as 200 million credits over the next 25 years. At today’s prices, that would be worth about $2 billion, according to data provider Allied Offsets, roughly equal to Gabon’s sovereign wealth fund.

So far that’s yet to materialize. The British bank Standard Chartered Plc and Swiss trading firm Vitol SA have expressed interest, but neither have culminated in a deal. Investors are getting antsy.

Josh Ponte, a former gorilla researcher and special adviser to the President of Gabon and now an ACDG director, bemoaned the delay in carbon-credit revenue.

“The carbon play was a core incentive,” he said, sitting on a rudimentary platform that will eventually be a dining room. Other than some staff lodging, there’s little more to see. “But there’s since been a reality check on the timeline of the carbon credits, how they’ll work, and how they’ll fit with government strategy. It’s really tiring our investors.”

Directors at at ACDG, Kevin Leo-Smith (left) and Josh Ponte (right) examine camera traps near the site where Petit Loango lodge will be built on October 12, 2022. As part of the forestLAB bio-monitoring programme, 10 camera traps were deployed at Petit Loango between April and July 2022. The camera traps recorded at least 21 species – the most frequently documented being blue duiker, red-capped mangabey and forest elephant. Other species recorded included forest buffalo, red river hog, chimpanzee, gorilla, hippopotamus, giant pangolin, leopard, crocodile, nile monitor and water chevrotain.
A forest elephant roams near Gamba on October 12, 2022.
Josh Ponte (center right), who now serves as an ACDG director, checks camera traps near future site of the Petit Loango lodge. The camera traps recorded over 20 species, including forest elephants. Photographer: Guillem Sartorio/Bloomberg

Gabon Vert, the environmental pillar of the Bongo administration’s development plan, frames both its deal with ACDG and the country’s plans to issue its own, sovereign carbon offsets. Gabon’s offering will rely on different math. It plans to tally the CO2 its trees suck out of the atmosphere, subtract its own emissions, and sell the difference to other, more polluting countries as “net sequestration” credits.

Anyone can issue carbon credits, and anyone can buy them. Most developers use third-party verification bodies to vouch for the quality of their offerings. Gabon doesn’t plan to do so. Fledgling exchanges are also trying to streamline trade, but for now, over-the-counter, bilateral deals are the most common.

It’s not clear the markets will bite. Gabon’s plans have been met with caution. It’s yet to sell some 90 million credits it already generated for past carbon absorption using an established albeit contested approach.

“It always makes me nervous when people say they’re going to roll out their own methodology,” said Danny Cullenward, policy director at nonprofit research group CarbonPlan. “It’s really easy to manipulate the methodology intentionally or incidentally to produce outcomes that are less credible or inconsistent with other key points of data.”

Methodology aside, political uncertainty hangs over Gabon. The fate of Gabon Vert may depend on the outcome of the presidential election later this year.

Though a member of the Bongo family has led Gabon for the past 56 years, the current presidency is under a cloud. Ali Bongo won his most recent election by fewer than 10,000 votes, triggering charges of ballot-rigging and days of violent protest. A 2019 coup attempt failed, and Bongo has had a stroke.

Ahead of this year’s presidential election, the government has embarked on an aggressive green diplomacy push. In February, a delegation joined the UK’s environment ministry and King Charles III to chat conservation. This week, Emmanuel Macron will attend a “One Forest” summit in Libreville, the first time a French president has visited the country in about a decade.

The Grande Mayumba project was already halted once, in 2015, when Gabon’s then-oil minister gave the site of a proposed port to a Moroccan company, despite an agreement that assigned it to ACDG. Development stalled until the dispute was resolved in 2018.

“If the president were to change, I’m not convinced that the model has got deep enough roots yet to be fully sustainable,” said Lee White, environment minister in Bongo’s government. The project also is facing a groundswell of opposition from local communities and NGOs. A grassroots campaign called “No to Grande Mayumba” calls for the suspension of the plan, saying restrictions on access to resources threaten the custom and livelihoods of subsistence farmers who haven’t been adequately consulted.

“There’s sacred forest here and the local population should be consulted on what can and can’t be cut down,” said Nicole Nouhando, governor of Nyanga province who’s broadly supportive of ACDG’s plans.

ACDG has had its own turmoil. Alan Bernstein, the South African safari entrepreneur who founded the company, left after a falling-out with its biggest investors. ACDG says he no longer holds stock in the group; Bernstein says he is seeking compensation after an initial court settlement in January.

Aerial view of Libreville on October 8, 2022.
Aerial view of a primary forest in the Nyanga region on October 12, 2022.
During a two-hour flight from the capital of Gabon, Libreville, to a cattle ranch in the southernmost province Nyanga, the land below is a nearly unbroken stretch of textured green carpet. Photographer: Guillem Sartorio/Bloomberg

For now, Gabon and ACDG are pushing ahead. In the absence of oversight, their success depends less on whether the credits help avert climate change and more on whether and how much a buyer will pay.

In December, US oil company Hess Corp. sealed the first purchase agreement for a similar kind of “high forest, low deforestation” credits with Guyana. Earlier in the year, the International Civil Aviation Organization said those credits could be used by airlines to offset their emissions. Experts have cautioned the credits will fail to serve their purpose.

If ACDG or Gabon can make a deal, it will add fuel to the efforts of other rainforest nations across the world’s tropical belt.

It could also pit the government at odds with the private sector. Gabon is one of a handful of countries with agreements to generate and trade their own carbon credits under a new carbon market run by the United Nations, according to Trove Research Ltd., a carbon analytics company. Last year, White castigated TotalEnergies over a new forest-based credits plan in Gabon. “They don’t have the rights” to that carbon, he said.

ACDG retains the government’s support. The success of the Grande Mayumba project would encourage “forest countries to continue preserving their forests,” said Daouda of Gabon’s sovereign wealth fund, which will market the country’s carbon credits. For him, it would answer the country’s big question in the affirmative: “It would mean that today, the world is recognizing that a living tree has higher value than a dead one.” —With Akshat Rathi and Ben Elgin

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How regulation hitches are limiting carbon trading

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As countries around the world race to combat the effects of climate change, carbon trading continues to gain traction.

Carbon trading is the buying and selling of permits of carbon credits that allow the holder to emit a certain amount of carbon dioxide and other greenhouse gases (GHGs).

Financial site Investopedia defines a carbon credit as the equivalent of one tonne of carbon dioxide or any other GHGs that an organisation can emit into the atmosphere.

Essentially, companies are awarded credits to allow them to continue to pollute up to a certain limit, often on a reducing basis.

What happens when a company exceeds its limits?

While some businesses are able to cut their emissions, others are not able to do so. For some, their emissions might even increase in the course of a given period.

Those that cannot reduce their emissions are, however, allowed to continue operating, but usually at a higher cost.

In some instances, businesses are unable to exhaust their credit limits even after operating for the marked duration. These are called ‘‘surplus’’ or ‘‘excess’’ credits.

When a business is left with unutilised credits, it can sell them to other businesses. The business may also choose to keep the surplus credits for future use.

What is the difference between carbon credits and carbon offsets?

While carbon credits and carbon offsets are sometimes used interchangeably, they are different commodities with the same goal of reducing the emission of carbon and other GHGs into the atmosphere.

Carbon credits are limited to within an area and are regulated by a governing body. It is this governing body that is also responsible for creating and distributing them to companies operating within that jurisdiction.

Carbon offsets are neither created by a specific entity nor distributed by a particular body. Instead, they are traded freely on ‘‘voluntary markets.’’

Read: Northern Kenya conservancies eye pie of carbon credit billions

While carbon credits ‘‘cap’’ emissions, carbon offsets compensate an organisation for investing in carbon projects, also called green projects, that help to cut down emissions.

Carbon offset projects can be realised through activities that either reduce the emission of greenhouse gases or those that increase carbon sequestration.

Some of these activities may involve investment in renewable energy forms to displace fossil fuels that emit carbon and reforestation to increase the number of trees that serve as carbon sinks.

Does Kenya have a history of carbon trading?

This trade dates back to 2014. A group of 60,000 smallholder farmers in the Western region under the Kenya Agricultural Carbon Project (KACP) earned carbon credits for sustainable farming.

The credits had been issued worldwide under the sustainable agricultural land management (SALM) carbon accounting methodology.

The programme supported the farmers to grow crops in a productive, sustainable and climate-friendly manner.

With its forests, expansive grasslands and wetlands, Kenya is considered a rich carbon offset sink. This is expected to improve even further once the country attains its target of planting 15 billion trees in the next 10 years.

How is carbon trading regulated in Kenya?

One of the functions of the National Climate Change Action Plan under the Climate Change Act of 2016 is ‘‘to guide the country toward the achievement of low-carbon climate-resilient sustainable development.’’

It does not, however, address specifically how trading in carbon credits, as a climate change response, will be regulated in Kenya.

Environment lawyer Stella Ojango acknowledges the gaps, noting that Kenya’s limited regulatory framework and absence of requisite laws make carbon trading in the country an almost opaque undertaking.

‘‘We have the Climate Change Act of 2016, but it does not address carbon trading sufficiently. We need to amend that Act so that we can introduce regulations for trading carbon. Enriching our laws will help to regularise this business.’’ Ojango says.

Last year, the Nairobi International Finance Centre (NIFC) said Kenya lacks a clear framework for buying and selling carbon credits locally.

The body noted that this unregulated sale of carbon credits costs the country billions of shillings in unrealised revenues.

The organisation is planning to establish a carbon trading exchange in the country to allow small-scale trade-in credits.

‘‘We need to have in place mechanisms that measure how much carbon is being absorbed through reforestation. This way, we will have created a market. Regulating the pricing aspect will then become easier,’’ Ojango adds.

How are carbon markets regulated elsewhere?

Kenya is not alone in lacking proper regulation for carbon trading. Most of the carbon credit markets in the developing world are unregulated by law. There are no agreed prices for carbon credits.

Plans are underway to establish a global carbon credit and carbon offset trading market. This was agreed on by negotiators at COP26 in Glasgow in 2021. Carbon credits also exist within markets with Cap & Trade regulations.

Who is trading in carbon credits in Kenya?

A number of businesses and organisations are already making money from either carbon credits or carbon offset programmes.

In Northern Kenya, conservancies are increasingly moving away from tourism as their mainstay to now invest in carbon projects as a source of revenue.

Northern Rangelands Trust (NRT), for instance, has put 4.7 million acres of grassland under a carbon project.

NRT is a group of 39 marine and land conservancies that cover, among other counties, Laikipia, Samburu, Tana River and Lamu. Out of these, 14 are under the project.

The Northern Rangelands Carbon Project will focus exclusively on the removal of carbon from the soil, with a target of 50 million tonnes of CO2 in 30 years. This effectively makes it one of the few projects of this scale in the market globally.

Last year, Kenya Forest Service (KFS) signed a deal with global audit firm BDO that would see the government agency earn millions of shillings for offsetting carbon dioxide.

According to the deal, KFS will rake in $15 (Sh1868) for every tonne of carbon dioxide removed from the atmosphere by government forests.

In villages in coastal Kenya, communities living near the sea are selling ‘‘hewa kaa’’ to international corporations to help them reduce their carbon emissions.

This carbon project is promoting the conservation and sustainable use of mangrove resources by the villagers.

Controversy of trade

While widely adopted around the world today, carbon credits still divide opinion. Those in support say carbon trading is a ‘‘measurable and verifiable’’ emissions reduction strategy through climate projects.

Those opposed to carbon offsets call the trade ‘‘a scammer’s dream scheme’’ and the next big thing in greenwashing.

Climate change advocacy organisation Greenpeace dismisses carbon offsets as a bookkeeping trick ‘‘intended to obscure climate-wrecking emissions.’’

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Zambia aims to be financial hub, as Hichilema unveils first ever 10-year Capital Market Master Plan

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President Hakainde Hichilema has unveiled Zambia’s first ever 10-year Capital Market Master Plan (CMMP) meant to among others, spearhead development of green bonds.

Government has in the Eighth National Development Plan (8NDP) earmarked capital markets as a critical success factor in achieving the objectives of the plan.

According to President Hichilema during the launch of the plan on Thursday in Lusaka, the CMMP had special focus on the development of new and innovative products on markets such as green bonds.

Zambia’s aspiration, he stated, was to become a financial hub that would seek to attract financing, including green bonds

He said this in a speech read for him by Finance and National Development Minister, Situmbeko Musokotwane.

“Under this pillar, the plan motivates for the introductions of innovations such as green bonds, private equity, and virtual capital among others. “This focus area creates an opportunity for the developing products that allow access to capital by Micro, Small and Medium Enterprises through mortgage refinancing,” Hichilema said.

He said another area of focus was improving the traditional security markets which included the stock market, corporate bond markets and collective investments scheme.

He said the CMMP was a comprehensive long term strategy which sets out the primary framework for Zambia’s capital markets development over the next 10 years.

“The plan will ensure that Zambia is an attractive destination to not only local but also foreign investors. The capital markets in Zambia were primarily established to stimulate a dynamic private sector. “I am optimistic that the launch today signals our resolve to set in motion the necessary interventions required to fully develop our capital markets as they are essential for creating employment for the youth,” Hichilema said.

Speaking earlier, Securities Exchange Commission (SEC) Chief Executive Officer, Phillip Chitalu said the launch of the CMMP signified that the market developmental efforts will change in to a fast pace moving train.

Chitalu urged the market players to contribute to achieving even further and greater success in the market contribution to economic development.

“This capital markets journey will not end here but should be carried on by those who will take over from us. I think 10 years is a long time. “For capital markets to have intended impact on our economy the common goal should have the capital markets taken to a level where these financial markets are enablers and cane be used to mobilise and channel in an efficient manner funds to the greatest economic impact,” he said.

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Inaugural Capital Markets Master Plan launched

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• Capital Markets Master Plan is a comprehensive long-term strategy which sets out the primary framework for Zambia’s Capital Markets development.
• Zambia’s aspiration is to become a financial hub that will attract financing including Green Bonds.
• The plan aims at enhancing the Government Bond Market by implementing measures aimed at improving market operations.

President Hakainde Hichilema says government has reduced borrowing from the domestic market from K24 billion in 2022 to K16 billion in 2023.
Officiating at the launch of the Capital Markets 10 year Master Plan (CMMP), President Hichilema noted that borrowing too much from the domestic market stifles the required capital for private sector growth.

The Head of State said Zambia’s aspiration is to become a financial hub that will attract financing including Green Bonds and the Master Plan’s focus to improve the traditional security markets which include the stock market, corporate bonds market and collective investment schemes.

“The Capital Markets Master Plan is a comprehensive long-term strategy which sets out the primary framework for Zambia’s Capital Markets development over the next decade. It is an important tool that seeks to organize various actors in a manner that will be convincing, for holders of the capital to consider Zambia as a choice destination for investments. The Master Plan will ensure that Zambia is an attractive destination to not only local, but also foreign investors.”

“I am optimistic that the launch of the master plan signals our resolve to set in motion the necessary interventions required to fully develop our Capital Markets as they are essential for creating employment opportunities for our youth, enhanced access to capital for small and medium enterprises, and facilitate our transition to a green growth economy,” President Hichilema said.
He added that the Capital Markets Master Plan’s other motive is to introduce products such as Green Bonds, private equity, venture capital, real estate investment trusts, and derivatives among others.

“The plan aims at enhancing the Government Bond Market by implementing measures aimed at improving market operations. As a government, we have also realized that borrowing too much from the domestic market stifles the required capital for private sector growth. It is in this regard, that the New Dawn Government has reduced government borrowing from the domestic market from K24 billion in 2022 to K16 billion in 2023 and going forward, we hope to reduce even further,” he stated.

President Hichilema said this in a speech read on his behalf by Minister of Finance and National Planning Dr. Situmbeko Musokotwane.
Speaking at the same event, Securities and Exchange Commission (SEC) Chairperson Ruth Mugala stated that the inaugural launch of the Master Plan is a milestone in the history of Zambia’s Capital Markets.

“The work of actualizing what is contained in the Master Plan has just began As the Apex Regulator of the Capital Markets in Zambia, SEC is mandated under the Securities Act number 41 of 2016, (as amended) to create and promote conditions in the Capital Markets aimed at ensuring an orderly growth, integrity, and developments of the capital markets. The foregoing entails a dual mandate of promoting the orderly development of the markets, on one hand, whilst on the other – protecting investors.”
“We know that beyond our borders, investors are looking our way considering the astute leadership Government has taken towards creating Zambia as an attractive destination for investments,” Mrs. Mugala stated.

Meanwhile, Financial Sector Deepening (FSD) Africa Director-Capital Markets, Dr. Evans Osano revealed that a recent study on the landscape of Green finance in Africa highlights the gap between the funding available that is needed to deliver Africa’s Nationally Determined Contributions (NDCs) that has been estimated at US$277 billion per annum against Climate financial flows into the Continent which are slightly less than US$30 billion per annum.

Dr. Osano added that Capita Markets play an important role in mobilizing much needed long-term finance to fund real and social sectors and build climate resilience, adding that Zambia’s goal to launch Green Bonds in 2024 is very visible.

“The need to build climate resilience in Africa has never been more urgent. I am happy to note that the government’s commitment to providing facilitative environment for climate financing and a series of environmental sustainability measures and the recent budget, includes proposals which will incentivize the development of Green Bonds market,” he said.

The Capital Markets Master Plan (CMMP) is a ten-year long term strategy for capital markets development in Zambia.

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New platform to boost environmental impact financing in Africa

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Today, the European Investment Bank (EIB) and the Green Climate Fund (GCF) announced their collaboration in the Green and Resilience Debt Platform, a vehicle that aims to boost climate finance in Africa. The platform contributes to the European Union’s Global Green Bond Initiative, which relies on a governance structure defined by the European Commission and European development finance institutions. It will be implemented in partnership with the United Nations Development Programme and United Nations Capital Development Fund. The announcement came in the margins of the First EIB Group Forum in Luxembourg, which gathers policymakers, financial institutions and business leaders to discuss pressing issues of the time.

The new platform will focus on climate resilience and blue bonds in Africa. It will provide technical assistance to partner countries, promote a climate sensitive investment environment, create a pipeline of bankable green investments, and strengthen domestic and regional green debt ecosystems and financial institutions. It will also provide access to anchor investments in green bond issuances.

GCF will provide financing through its Project Preparation Facility window to support the design and establishment of the Green and Resilience Debt Platform. This support will initially focus on Cote d’Ivoire and Kenya with the potential for additional countries to be added. GCF will examine the platform’s feasibility and impact in these countries, in playing a unique role to align large financial flows with each country’s Nationally Determined Contribution and National Adaptation Plan.

A green, inclusive and resilient economic development worldwide requires an unprecedented scale of investment, particularly in high-quality infrastructure. Green bonds are widely recognized as part of the solution. Global experience has shown they are key in mobilising capital from private investors for investments with environmental impact. However, emerging and developing economies face specific barriers when it comes to green bonds. Their respective markets remain largely underdeveloped and continue to grow at a much slower pace than those of developed countries. The situation is particularly grim in least developed countries on the African continent. Africa accounted for only 0.077% of the total bond issuances 2021. In 2019/2020, only 3% of the total climate finance provided worldwide went to sub-Saharan Africa.

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Horn of Africa drought worse than 2011

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1. Horn of Africa drought persists

Three years of drought conditions in the Horn of Africa show no signs of letting up, according to a Kenya-based climate monitoring group. The IGAD Climate Prediction and Applications Center (ICPAC) says that below average rainfall is expected over the next three months, which is normally the region’s rainy season.

“In parts of Ethiopia, Kenya, Somalia, and Uganda that have been most affected by the recent drought, this could be the 6th failed consecutive rainfall season,” ICPAC predicts.

In contrast “wetter than normal conditions are expected over the cross-border areas of Ethiopia and South Sudan, north-western Kenya, and parts of central and southern Tanzania”, says the climate centre. Temperatures are also likely to be higher across the region, it adds.

The IGAD Climate Prediction and Applications Center (ICPAC) says that below average rainfall is expected over the next three months, which is normally the region's rainy season.

The IGAD Climate Prediction and Applications Center (ICPAC) says that below average rainfall is expected over the next three months, which is normally the region’s rainy season. Image: ICPAC

In the most severely affected areas, drought conditions are worse than in 2010-2011 when hundreds of thousands of people died, according to ICPAC. An estimated 23 million people are currently “highly food insecure” in Ethiopia, Kenya and Somalia, and 11 million livestock in the region have died, it says.

IGAD has also announced plans to partner with the International Federation of Red Cross and Red Crescent Societies (IFRC) to help address the crisis. “These prolonged and recurrent climate change induced droughts will further worsen other existing, mutually exacerbating humanitarian challenges in the region, including the ongoing hunger crisis, the impacts of COVID-19 and internal displacement,” said IFRC director Mohammed Mukhier. “We need an all-hands-on-deck approach to strengthen food systems, livelihoods, and climate resilience.”

2. Plastic use in G20 could nearly double by 2050

Plastic use in G20 countries is on course to nearly double by the middle of the century unless a comprehensive and legally binding global treaty to curb consumption is drawn up, according to research.

Existing programmes to boost recycling or cut single-use plastic consumption only “scratched the surface” and a more comprehensive global plan is required, according to Back to Blue, a research group run by the Economist Impact think-tank and the Nippon Foundation, a private philanthropic organisation.

The United Nations began talks in November on an agreement to tackle plastic pollution. Around 175 countries have signed up to the talks which aim to draw up a legally binding treaty by the end of 2024.

However, if negotiations fail, annual plastic production in G20 countries could rise to 451 million tonnes by 2050 according to current rates of growth, Back to Blue says – up nearly three-quarters from 2019.

“There should be no illusions that the treaty negotiations will be anything but difficult and treacherous,” the research group said. “The chances of failure – not just that no treaty emerges but one that is too weak to reverse the plastic tide – are considerable.”

It’s calling for a more aggressive ban on single-use plastic, together with higher production taxes and mandatory schemes to make firms responsible for the entire lifespan of their products, including recycling and disposal.

3. News in brief: Top climate crisis stories this week

The fossil fuel industry is failing to tackle methane emissions despite its pledges to uncover and fix leaking infrastructure, according to a report by the International Energy Agency (IEA). The global energy industry released some 135 million tonnes of the potent greenhouse gas into the atmosphere in 2022 – only slightly below the record amount released in 2019.

Developed nations' failure to deliver on a decade-old commitment to pay billions in annual climate financing to developing nations is a "travesty".

Developed nations’ failure to deliver on a decade-old commitment to pay billions in annual climate financing to developing nations is a “travesty”. Image: IEA

Developed nations’ failure to deliver on a decade-old commitment to pay billions in annual climate financing to developing nations is a “travesty”, according to Achim Steiner, administrator of the UN Development Programme. Wealthy nations are yet to deliver on the 2009 pledge to provide $100 billion per year to help developing nations mitigate rising global temperatures.

Total ecosystem collapse is “inevitable” unless unprecedented current wildlife losses are reversed, The Guardian reports. Scientists studying the Permian-Triassic extinction event of 250 million years ago, known as the “Great Dying”, found that ecosystems can reach a tipping point from which they are unlikely to recover.

The carbon price in the EU’s emissions trading system has gone over 100 euros ($105) per tonne for the first time, reports the Financial Times. It’s seen as a landmark moment as it may encourage companies to invest in technologies to fight the climate crisis, like carbon capture, utilization and storage.

A team of influential economists has published a report urging China to adopt a new development model based on “wellbeing” rather than GDP growth in order to fulfil its 2060 net-zero emissions goals. China aims to bring emissions to a peak by 2030, though at what level they will peak is currently unclear.

France is preparing to introduce restrictions on water use in parts of the country from March, in an unprecedented move for the time of year. It follows the driest winter in 64 years.

New data shows that only 0.4% of companies have a credible climate transition plan, reports Energy Monitor. An assessment of 18,600 companies by non-profit the Carbon Disclosure Project found that only 81 of the 4,000 claiming to have a climate transition project in place had a plan that met all of its key indicators for transition.

4. More on the climate crisis on Agenda

Resource recovery and waste management are essential parts of a circular economy. However, two experts from Saahas Zero Waste argue that there is large-scale global resistance to taking accountability for the materials we use and consume.

A Berlin neighbourhood will embark on a novel experiment this coming summer: eliminating parking spaces. The idea behind the project is to devote the space usually reserved for cars to other uses like growing plants or providing recreation.

Australia and New Zealand have both faced a series of devastating floods triggered by the climate crisis and the return of the La Niña weather pattern. In the aftermath of Cyclone Gabrielle, a climate expert explains how Australia’s experiences might offer New Zealand a guide for recovering.

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Digital Africa’s “Talent 4 Startups” pilot program is a success!

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Digital Africa, in partnership with Make-IT in Africa, launched Talent 4 Startups in 2022. The program’s objective is to improve the employability of African talent in startups through fully-funded trainings. The program was designed on the basis of a repository of skills and jobs required by startups on the continent, developed with Edtech Connections.

The digital skills gap in Africa will reach 230 million jobs by 2030, yet only 690,000 professionals in the sector have been identified to date. More than 70% of African companies say they cannot find locally the skills they need to grow. In this context, it is becoming increasingly important to train tech talent and place them in jobs in order to accelerate the continent’s digital transformation. Startups emphasize the need to strengthen their technical and entrepreneurial skills to accelerate their development.

Digital Africa brought together all partners involved in Talent 4 Startups on November 8th and 9th at the D-HUB in Dakar to highlight the challenges that remain between training digital talent and their placement in startups, and to discuss the next steps of the project.

More than ever, Digital Africa wishes to reinforce its action with the actors in the field, in order to train more young talent during the next edition of the “Talent 4 Startups” program.

By 2025, the program aims to finance 1,000 trainings in the tech and digital sectors in Africa and to co-construct the means to build a “talent pool”.

Built through a multi-stakeholder approach, this program was developed by Digital Africa in partnership with Make-IT in Africa, a project implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).

Key figures of the “Talents 4 Startups” program:

  • 10300 applicants to the program
  • More than 280 students trained
  • Training in 8 of the most in-demand professions identified in the skills and jobs repository

Full Stack developers / Front end and back end developers / Data scientists and analysts / Software engineers and Full Stack engineers / Mobile and Web developers / Digital Marketers / Growth hackers/engineers

  • By 9 Digital Education Providers selected following a call for proposals targeted at training organizations operating on the continent

Algrowithm / Blossom Academy / Edacy / Kinshasa Digital Academy / Moringa School / Open Classrooms / Sayna / Simplon MCS / Simplon Ivory Coast

  • in 10 countries

Democratic Republic of Congo / Nigeria / Ghana / Kenya / Senegal / Cameroon / Ivory Coast / Madagascar / Algeria / Morocco

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