Ndubuisi Francis in Abuja
The United Nations Conference on Trade and Development (UNCTAD) has called for an urgent international climate funding, stating that Nigeria and other African countries require an estimated N3 trillion by 2030 for climate mitigation and adaptation.
This is contained in the just-released ‘Commodities and Development Report 2023’ with the theme: ‘Inclusive Diversification and Energy Transition.’
The report outlined how commodity-dependent developing countries like Nigeria could pursue inclusive economic diversification in the context of the global energy transition, noting that decades of over-reliance on exporting a few raw materials, including oil, copper, cacao and wheat, among others, has hindered these nations’ growth and undermined their people’s well-being.
“Many of these countries have untapped potential for renewables like solar and wind that could broaden their economic horizons and improve livelihoods.
“But the diversification process needs careful navigation to avoid worsening inequalities.
“The shift to renewables could leave these countries with vast fossil fuel reserves stranded – including abandoned oil fields, plants and equipment – and this will affect the communities and people that depend on industries like gas and oil.
“Another risk is that the surge in demand for critical minerals like lithium and cobalt that are needed for green technologies could undermine diversification efforts in mineral-rich countries,” it said.
Countries reliant on fossil fuel exports, the report observed, face hurdles in the energy transition, adding that to limit global heating to 2°C, vast reserves – up to a third of the world’s oil, half its natural gas and 80 per cent of its coal, must go unused.
It called on commodity-dependent developing countries to steer diversification efforts towards sectors with high potential to create jobs and boost income.
The report urged such countries to identify and promote priority sectors for diversification, align education to the skills needed and boost efforts to strategically attract foreign investment, as well as begin diversifying along low-emission paths to cut greenhouse gas emissions and reduce fossil fuel dependency.
Although commodity dependence is a global concern, UNCTAD noted that it affects developing countries the most.
“Between 2019 and 2021, only 12% of advanced economies, including Australia and Norway, were on the list, compared to a staggering 74% of the world’s least developed countries.
“A total of 29 out of the 32 nations classified as having low human development in 2021 were commodity dependent, according to the UN’s Human Development Index,” the UNCTAD report stated.
It outlined actions to avoid past commodity traps, offering a blueprint for tailored green industrial policies to ensure a fair low-carbon transition that benefits everyone, striking the right balance between the right to development and the need to protect the environment.
UNCTAD called on the global community to take a number of steps, including providing adequate financial support and technical capacity-building to mitigate the climate-related risks associated with the just transition.
Others are helping commodity-dependent countries manage price shocks by establishing rules to limit market speculation and reintroduce funds to keep export revenues steady, boost cooperation to fight tax avoidance and evasion and direct the global financial system towards more productive investments, such as infrastructure.
It also urged the global community to promote the transfer of green technologies to commodity dependent developing countries.
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