If there were any doubts in West Africa about the impact of climate change on nations with underlying sustainability issues, including poor infrastructure and food insecurity, the recent floods in Nigeria — economic powerhouse of the region — should have dispelled them.
Over 1.3 million Nigerians have been displaced by the floods, which have killed at least 600 people, destroyed more than 200,000 homes, and hit 32 out of the country’s 36 states. The floods are the worst for more than a decade and have wiped out crops, disrupted drinking water supplies, and turned capital city Lagos into an island surrounded by floodwaters.
Speaking last month during the International Monetary Fund and World Bank Annual Meetings in Washington, DC, Mai Farid of the fund’s African department warned about the impact of the floods, which have also hit Cameroon and Chad, on transport, food production, and prices.
Farid noted that Nigeria is part of the most food-insecure region, the region most vulnerable to climate change and yet the least prepared. She urged the government to invest in infrastructure and technology to help prevent and mitigate the impact of floods and other climate-related natural disasters in the future: “Rebuilding better is something that countries need to take into account since climate change is not going anywhere and is inevitable.”
Nigeria is Africa’s most populous country and largest economy. Even before the latest flood, it faced rising food insecurity as a combination of a mostly informal agriculture sector and growing population puts pressure on the country’s food resources. According to the World Bank’s development indicators, food insecurity increased from six percent of the Nigerian population in 2007 to 13.4% in 2017.
The agriculture sector is the largest contributor to the Nigerian economy and employs two-thirds of its workforce. However, according to the United Nation (UN) Food and Agriculture Organization, food production in Nigeria is undermined by a number of factors, among them poor planting material and insufficient use of fertilizer, which leads to a growing reliance on food imports.
To help address these issues and support smallholder, the Convention on Business Integrity’s for-profit arm Innovations Limited, or CBiIL, chose the SAP Rural Sourcing Management solution to support 850,000 small maize producers and integrate them into the agricultural value chains.
While West Africa, like Africa as a whole, is still heavily dependent on agriculture, it is home to some of the world’s fastest growing mega cities like Lagos, so urbanization and the associated environmental issues are top of mind, particularly among young adults.
The region also has a reputation for leap-frogging old technology — first mobile technology and now with cloud computing. In Nigeria itself, the number of mobile phone subscribers is forecast to grow to more than 140 million by 2025 from about 40 million currently.
As Africa’s largest oil and liquified natural gas (LNG) producer, Nigeria is on the front line of the debate over sustainable development in the West Africa. It is also a key market for SAP, which counts among its customers Nigeria LNG, which operates six LNG liquefaction units, and Dangote Group, the conglomerate founded and run by Nigerian billionaire Aliko Dangote.
The group’s Dangote Cement unit already publishes an annual sustainability report, part of Aliko Dangote’s personal commitment to build “a socially responsible and impactful business that serves all stakeholders.” Dangote is also close to completing the Dangote Refinery, the world’s largest petroleum refinery capable of processing 650,000 barrels of oil per day. When it comes online, the $20 billion refinery will enable Nigeria to process most of its oil instead of exporting crude to be refined overseas.
“We are having conversations with Dangote about some of our sustainability solutions and how they measure their impact on the environment,” says Titilayo Adewumi, regional sales director for West Africa at SAP.
Nigeria LNG is also committed to sustainability and is Africa’s largest LNG exporter, but has recently been operating well below capacity because of a number of factors, including under-investment in recent years and endemic crude oil theft. “If we don’t address this, we will not get out of this quagmire that we are in,” Nigeria LNG Managing Director recently warned Philip Mshelbila. Speaking last month at a conference in Lagos, Mshelbila also acknowledged that the flooding has reduced the gas supplies from the company’s upstream suppliers, though he said Nigeria LNG’s facilities remain unaffected and its capacity to produce LPG is intact.
Companies in Nigeria also have to grapple with unreliable electricity supplies and frequent power outages, a problem that business leaders say has led some manufactures to relocate to neighboring Ghana, which has a much more reliable electricity system.
Ghana is the regional leader in addressing plastics pollution and circular economy issues. A groundbreaking pilot project between the World Economic Forum (WEF), the Global Plastic Action Partnership (GPAP), and SAP in Ghana is increasing visibility within the plastics supply chain with the hope of benefiting people, companies, and the environment.
The project involves more than 2,000 Ghanaian waste pickers and makes use of an adapted version of SAP Rural Sourcing Management to measure the quantities and types of plastic they collect. Data is then analyzed and matched to market-related prices paid throughout the value chain both locally and internationally.
Ghana generates an estimated 1.1 million tons of plastic waste every year, with only five percent collected for recycling. This new pilot project is currently running in several cities across Ghana, with hopes of expanding to the rest of the region and ultimately the continent through the GPAP-Africa Regional Coordination Working Group, which includes SAP.
Across the region, the bulk of SAP customers are choosing cloud solutions rather than on-premise technology and SAP seeks to help customers deliver on their climate goals by creating greater efficiency, transparency, and accountability of carbon and emissions across the entire supply chain and innovating new processes and business models.
But SAP Africa Managing Director Cathy Smith and other experts caution that while sustainability and environmental, social, and governance (ESG) issues are an increasingly important part of the conversation among governments and corporate leaders, it is important to recognize that customers in Africa often have other — perhaps higher — priorities.
In particular, they say business leaders need to be persuaded that sustainability makes good business sense and will ultimately benefit the company, economy, and people.
“We lead by asking about their business priorities, and then we fold in sustainability,” Smith explains. “It’s just a different approach.”
