Manohar Parrikar Institute for Defence Studies and Analyses
मनोहर पर्रिकर रक्षा अध्ययन एवं विश्लेषण संस्थान

Exploring the Blue Economy to Bridge Funding Gap in Nigeria

Chidiebube Jasper Uche
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Introduction

Nigeria is in dire straits. It is gasping for breath to cope with its fiscal challenges. The country faces budgetary anxiety as a result of slump in oil prices, which is benchmarked at US$ 60 per barrel. Thus, out of the N8.8trillion (US$ 24.291 billion) total expenditure in the 2019 budget, a humongous sum of N2.140trillion (US$ 5.887 billion) is for debt servicing, while N1.853 trillion (US$ 5.097 billion) deficit would be sourced through borrowing.1 Though a major oil producer, yet the country’s inability to prudently deploy the oil earnings, over the years, to jumpstart economic growth, is its greatest undoing. Sadly, the discovery of shale oil by the United States, a rivalling influence of Angola in oil production and emergence of other oil producing countries in Africa, as well as spirited divestments into alternative sources of energy, make the situation more precarious for Nigeria. Hence, the country is sliding into a strategic failure.2

However, there are brimming opportunities that the ‘blue economy’ offers, which Nigeria can leverage to free up resources, and address the multi-faceted developmental priorities.  The concept of ‘blue economy’ was first used in 2010 by Gunter Pauli, and in 2012, it gained prominence in global political economy discourse at United Nations Conference on Sustainable Development in Rio de Janeiro (Rio + 20).  

According to the European Union (2012), ‘blue economy’ represents “all economic activities related to the oceans, seas and coasts”.3   Otherwise known as ‘marine economy’ or ‘ocean economy’, it entails the application of innovative and sustainable approaches in development and exploitation of resources in oceans, rivers, lakes and other water bodies. Globally, the annual ‘gross marine product’ (GMP) measured in the form of a country’s annual gross domestic product (GDP), according to World Wide Fund for Nature (2015) is put at US$ 2.5 trillion, while the cumulative ‘asset’ base of ocean economy is at least US$ 24 trillion.4 Interestingly, countries with the highest sovereign wealth funds cannot match the projected revenue from blue economy, if fully harnessed.  

Nigeria’s Assets

Nigeria has a 853km section of Africa’s 47,000 km coastline,5 and the shared coasts with Atlantic Ocean in the Gulf of Guinea and Lake Chad in the North East are of strategic significance. There are also River Niger (the longest River in West Africa and the third longest in Africa, after Rivers Nile and Congo), River Benue and other Rivers in the nine coastal states in Nigeria. These are crisscrossed by bays, lagoons, tributaries and estuaries. Generally, the water bodies in Nigeria take about 13,000 km2 out of the 923,768km2 total area.6   The oil-rich Niger Delta region harbours 80 per cent of the country’s coastline.7 Niger Delta has 3,000 rivers, with intertwining creeks, the largest wetland in the world,8 as well as the largest mangrove habitat in Africa – and 7th among the top 20 in the world.9

These abundant marine resources present huge opportunities for economic diversification as encapsulated in Nigerian government’s Economic Recovery and Growth Plan (ERGP).  A taxonomy of blue economy sectors with multivariate downstream economic activities as shown in Roy (2019) include: fishing, marine biotechnology, minerals, marine renewable energy, marine manufacturing, (shipping, port and marine logistics), marine tourism and leisure, marine construction, marine commerce, marine ICT and education/research, R&D.10 As such, ‘blue economy’ can stimulate massive jobs, boost international trade, enhance food security, generate multi-billion dollar revenue for government, and ensure sustainable usage of marine resources.

Harnessing the marine biodiversity for economic growth calls for a strong political will and right policies if Nigeria is to escape another round of recession. There should be a radical departure from the prevalent free-for-all abuses of the nation’s waterways exemplified in coral reef bleaching, oil spillages, unchecked mining and dredging activities, ocean warming and acidification, industrial pollution, unregulated resource exploitation and “unethical dumping of toxic and non-biodegradable by-products”.11  Management of the water bodies should therefore, be done in a sustainable manner.

Developing the Blue Economy

As a first step, government should establish a centre for blue economy research in any of the universities located in the coastal states. The institute should articulate the policy thrust, the roadmap, the areas of comparative advantage, and cost implications of short-term and long-term interventions, taking into cognizance the African Union’s declaration of 2015-2025 as the Decade of Oceans and Seas. Funding for research & development (R&D) in this direction should not be politicised. Second, the Ministry of Transportation and the Nigeria Maritime Administration and Safety Agency (NIMASA) should disburse the floating Cabotage Vessel Financing Fund (CVFF) established under the Cabotage and Inland Shipping Act 2003 to qualifying local players in the shipping industry. This will help address the inability to access the finance (which was derived from two per cent of revenues of ship owners) for maintaining or purchasing new vessels since 2004, has brought about a reduction of the number of operational indigenous shipping companies by about 43 per cent.12

Third, adequate policies should be emplaced to protect the mangrove ecosystem stretching from the coastlines of Badagry to Calabar. There should be conscious governmental efforts to accelerate mangrove reforestation, which not only serves as breeding ground for various species of fish, but also “functions as the biggest sequester of carbon-dioxide for biodiversity survival”.13 It is instructive to note that mangroves helped the communities in the Philippines surviving the Typhoon Haiyan in 2013 and this led Philippines to invest US$ 8 million for mangrove reforestation.14 So, Nigeria should not wait for a sweeping tragedy of climate change to do the needful. Fourth, the legal instruments to curb piracy, environmental degradation and despoliation, unregulated fishing (by local artisans and foreign vessels), and to facilitate public-private partnership investments in blue economy should be enshrined in the national laws. NIMASA’s initiative of 24-hour port surveillance through inter-agency collaboration and the ongoing construction of an ambitious floating dockyard are commendable.

Conclusion

Going forward, Nigerian government should promote a coherent win-win cooperation across sub-regional, regional and international marine economic fields. This begins with ratification of the six instruments of International Maritime Organization by the Nigerian government. They include: the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships (2009); International Convention on Standards of Training, Certification and Watch-keeping for Fishing Vessel Personnel; the Protocol Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties Intervention (1973); and Protocol on Limitation of Liability for Maritime Claims (LLMC) (1996).15

Overdependence on oil is no longer sustainable. Ambitious nations are investing heavily in blue economy taking into account the projected contributions to their GDP. Nigeria cannot be an onlooker. The sector is a ready cash cow to leapfrog the nation from economic doldrums and imminent fiscal crisis.

Dr. Chidiebube Jasper Uche teaches at the Department of Political Science, University of Nigeria, Nsukka.

Keywords: Nigeria
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