NIGERIA'S FAST LANE GREEN BONDS

From the look of things Nigeria will soon emerging markets into issuance of green bonds as debt instruments to raise finance for purely environment friendly or enhancing projects.

Towards this end, Federal Ministries of Environment, and Finance and the Debt management office successfully held a parley with private investors at the Nigerian stock exchange building yesterday, February 23, 2017.

It was well attended by investors, stockbrokers and investment professionals with federal ministers of Environment, Power and Housing also in attendance.

In her welcome address, Environment minister, Amina J Mohammed drew attention to the Paris agreement under which developed nations committed themselves to mobilising $100bn to support climate change efforts by developing countries by 2020 all to ensure that the goal of reducing emissions by 45% is achieved.

Nigeria, she said, was a signatory to the agreement and needs to position herself to tap this resource.

In his keynote address, the guest of honour, Acting President Yemi Osibajo told the audience that the first of Nigeria:s green bonds to be issued soon will use solar power to supply electricity to 45 communities, 37 federal universities and seven university teaching hospitals.

It will also be used to fund planting of economic trees in 26 states and put about 100 rapid transit buses on the Zubar Suleija corridor.

However, it appears the ongoing effort is rather on a fast lane that could send the wrong signals.

For example, minister for environment, in her speech said "capital needs to flow toward low carbon, climate resilient opportunities and away from carbon intensive, polluting activities or those that exercerbate climate vulnerability leading to poverty, insecurity, reduced health etc"

For Nigeria, that is not all of it. Because Nigeria is an oil and gas producing country, green funds too should flow into making efforts to make high carbon and polluting activities less polluting and more environment friendly.

The fast lane effect also too in the figures reeled out at the conference. The ones given by acting president in his speech were at variance with the printed documents distributed at the conference. This had to manually corrected.

It also showed in the initial target N20bn or thereabout to be raised which obviously was far below expectations of the pension fund alone around green bonds.

Pension funds are allowed to invest up to 5% of asset in bonds and right now, explained one of the panelists, it stands at N6tr with inflow of between N40 and N45 bn monthly and about 20% annual growth rate.

In green bonds, the pension funds will not only be reaping good returns if all fundamentals and transparency are got right but also, will be positively impacting on the environment retirees will retire into.

So, it will be epoch making if Nigeria breasted the. green bonds finish line ahead of emerging markets but this must not be at the expense of wholesome look that should make room for more systematic as against knee jerk fast lane green bonds.

For example, it has to be well established areas across the country federal greem bonds, state green bonds and corporate green bonds will be needed.

This is not an effort to make Nigeria less dependent on any section of the country but to make the Nigerian environment more friendly and less harmful and threatened.

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