UN SDGs, catalyst for new businesses, Local Content policy, says Jadesmi
The success story of the Lagos Deep Offshore Logistics Base LADOL has proven the efficacy of the United Nations’ Sustainable Development Goals, SDGs, as a framework for the development of new economy businesses and for maximising Local Content in low income high growth countries, says the Managing Director of LADOL, Dr. Amy Jadesimi.
Recall that LADOL is currently building the world’s first Sustainable Industrial Special Economic Zone SSEZ. It is using the UN SDGs to build a unique circular ecosystem, servicing a range of industries.
Dr. Jadesimi who made the disclosure at the OECD Africa Forum, explained that there are countries like Nigeria that are full of untapped, easily addressable business opportunities.
According to her, these new economy businesses can create new low cost, high return businesses through innovation and value added solutions for the local market.
She noted that the companies of the future and those that will be the most profitable ones are those that are sustainable, warning that companies that fail to embrace sustainability may soon become unviable.
She however cautioned that “the road to sustainably industrialising Africa will be a long one but that it will inevitably lead to peace and prosperity for the continent and the world. The first step is great international support from governments and investors for indigenous private companies across the continent because these are the companies that will create the jobs. Over time organisations such as LADOL, which may start out supporting commodity focused industries will diversify and expand, becoming increasingly sustainable until we reach net zero”.
Dr. Jadesimi also urged western countries to better regulate the actions of their companies and institutions in Africa, where many multinationals have been proven to instigate, promote and participate in practices that cause harm to the economies and the citizens in countries across Africa.
“In as much as we recognise that the regulatory environment across Africa needs to improve, we should not continue to have conversations about regulation in Africa unless we also discuss how wealthier countries that can better use their own laws and regulations to police the activities of their companies and representatives in Africa,” she said.
In addition, she reiterated that financial regulation is long overdue stating that “we know that there are trillions of dollars currently invested in negative or low yielding assets in only ten financial markets across the world.
“The world needs new financial regulations, which encourage investment into real businesses over long-time horizons and discourages unstable, short-term wealth creation through trading and complex financial instruments that no longer relate to the real performance of the underlying companies or assets. Such a regulatory framework would drive investment to Africa – which has both the youngest and the most locally underserved population, with vast untapped opportunities to create new products and solutions for the local market in the local market.”
Dr. Jadesimi hopes to see the development of a “sustainability credit” rating – that will be universally accepted and give investors the ability to invest in sustainable market driven business models.
This, according to her will channel funding into new companies with the potential to transform Africa, but which could never meet today’s definitions of “bankability” as applied in Africa. “This is critically important as none of the largest companies in the world today would exist if they had had to fund their companies from inception based on the draconian pre-conditions and high hurdles which African companies are being forced to adhere to and scale.”
On the African Continental Free Trade Agreement ACFTA, she said it is only good for Africa if countries in Africa insist on real local content being adhered to, i.e. “we need the products and services being traded in the Africa Free Market to be primarily if not entirely home engineered and manufactured.
“International companies can start engineering and manufacturing in Africa now, not only because they will get access to all 1.5 billion Africans, but also because there are local and public sector companies and facilities through which they can set-up and operate locally. Special Economic Zones in Nigeria, such as LADOL and the many zones being rolled out in countries such as Ethiopia, Kenya and Rwanda are examples of how easy it is for companies to decrease their costs and increase their revenues by operating in such Free Zones.”
Recall that the zone was developed out of a disused swamp and has been operational since 2006. Every year since then the infrastructure and facilities have grown and expanded, as it now provides a 24/7 efficient, safe and secure location from which local and international companies, in a range of sectors, can start operating immediately.
LADOL had in 2017 disrupted the local oil and gas market by halving the costs of local support, and creating thousands of local jobs. It is now focused on attracting and servicing a range of non-oil and gas companies, in sectors ranging from technology to agriculture. The sectors identified will work together to create a circular economy within the Zone.
Given that West Africa is one of the largest under-served markets in the world with the fastest growing population, industrial companies working in LADOL can service this market sustainably and profitably, while creating tens of thousands of jobs. As the local market grows there will be higher demand for locally produced products, a larger skilled workforce and cheaper domestic operating costs.