AfDB: Super El Niño May Cost Nigeria, Africa Up to $20bn, Trigger Mass Migration

• Oil prices slide as US, Iran pause hostilities over Strait of Hormuz •Shettima lauds AfDB as REA, SAPZ sign MoU on energy for agro-processing zones Deji Elumoye and Emmanuel Addeh in Abuja The African Development Bank (AfDB) has warned that an expected “super” El Niño weather event could cost African countries between $10 billion and $20 billion, reduce economic growth and force millions of people to leave their homes. El Niño is a naturally occurring climate pattern caused by unusually warm ocean temperatures in the central and eastern Pacific Ocean. Although it begins thousands of kilometres away from Africa, it changes global weather patterns, often bringing severe drought to some parts of the continent and heavy rainfall and flooding to others. Speaking to Reuters, the bank’s Director for Climate Change and Green Growth, Anthony Nyong, said countries most affected by the extreme weather could see their Gross Domestic Product (GDP) decline by between 1 and 2 per cent on average. Nyong said the worsening climate conditions would threaten food and water supplies, damage infrastructure and place additional pressure on government finances, especially as many countries are already struggling with debt. He explained that governments often divert money meant for health, education and infrastructure projects to respond to climate disasters, creating what he described as a “climate finance trap.” The AfDB had projected in May that Africa’s economy would grow by 4.2 per cent in 2026 and 4.4 per cent in 2027, assuming global geopolitical tensions ease. However, those projections were made before the latest warnings of a possible “super” El Niño. The previous El Niño event between 2023 and 2024 caused severe drought across parts of Africa, leading to poor harvests, rising food prices and record sea-level increases along the continent’s coastline. The AfDB estimates that African farmers have already lost about $330 million in income this year because of climate-related impacts, while the fishing sector is also expected to suffer as warmer sea temperatures reduce fish stocks. Nyong said Africa’s climate adaptation funding needs, previously estimated at about $50 billion annually, could now rise to as much as $100 billion because of the expected strength of the El Niño event. He added that the bank was preparing to review its projects in September and could restructure investments to help affected countries. The AfDB also plans to work with international climate funds, including the Green Climate Fund, the Adaptation Fund and other financing mechanisms, to mobilise additional support. Nyong warned that countries such as Sudan, South Sudan, the Democratic Republic of Congo, Somalia, Mali, Burundi and Nigeria could face particularly severe humanitarian challenges, including food shortages and displacement. He said maize prices could double in some areas, increasing pressure on vulnerable communities and triggering large-scale migration as people search for food, water and safer living conditions. He stressed that investing in climate resilience before disasters occur would be far cheaper than paying for recovery afterwards. “It is cheaper to build a fence around a precipice than to pay for expensive ambulances to wait at the bottom for people to fall,” Nyong said. “So let’s build a fence.” Meanwhile, oil prices fell sharply yesterday as traders reacted positively to a pause in hostilities between the United States and Iran, easing fears of further disruptions to global crude supplies through the strategically important Strait of Hormuz. Brent crude, Nigeria’s benchmark and the international oil price reference, dropped 9 per cent to below $88 a barrel during early trading, reversing much of last week’s gains when prices briefly surged to $100 a barrel following attacks by the Iran-backed Houthis on Saudi Arabian oil tankers in the Red Sea. By Monday evening, Brent had recovered slightly to trade at about $90 a barrel. The retreat in oil prices followed signs that the 13-day conflict between the US and Iran may be easing, raising hopes that diplomacy could replace military action and reduce the threat to oil exports from the Gulf. Iran said it had halted what it described as retaliatory attacks after two nights without US missile strikes. The development came after the US ambassador to the United Nations, Mike Waltz, disclosed that President Donald Trump had decided to suspend the bombing campaign to allow more time for diplomatic efforts. Separate reports also suggested that senior US military officials had advised Trump that the air campaign had reached the limits of its effectiveness. The developments boosted market confidence that tensions in the Middle East could ease after months of disruptions to shipping routes. Since late February, the conflict has affected the movement of oil and gas through the Strait of Hormuz and disrupted vessels transiting the Bab al-Mandab Strait from the Red Sea. Analysts at Deutsche Bank, led by Jim Reid, said the nearly 10 per cent jump in Brent crude prices last week had heightened concerns that the global economy could face a prolonged inflation shock, forcing central banks, including the US Federal Reserve, to maintain a more aggressive stance on interest rates. Higher oil prices typically increase energy costs, fuel inflation and place additional pressure on central banks to raise borrowing costs. Expectations of tighter monetary policy have also pushed up government bond yields in recent weeks, reflecting investor concerns over persistent inflation. Meanwhile, Vice President Kashim Shettima has applauded the collaboration among the AfDB, the Rural Electrification Agency (REA) and the Special Agro-Industrial Processing Zones (SAPZ) programme aimed at boosting the provision of affordable energy in the centres scattered across the country. He particularly commended the commitment and resourcefulness of the REA management, saying the SAPZ programme, if fully operationalised, has the potential of transforming agricultural productivity across the country and improving the wellbeing of rural communities. Shettima spoke yesterday in Abuja during the signing of the Memorandum of Understanding (MoU) between REA and SAPZ for the provision of affordable energy in all the SAPZ sites across the country. The agreement covers joint assessment, technical assistance, and energy deployment across the SAPZ sites under REA’s Desert To Power (DTP) programme. The Vice President, who was represented by the Deputy Chief of Staff (DCOS) to the President, Senator Ibrahim Hadejia, said the federal government welcomed the partnership and will encourage more collaborations that will help unlock the country’s potentials across all sectors but particularly in the agricultural sector. Earlier, Minister of Agriculture, Senator Abubakar Kyari, said the collaboration with the AfDB and the Federal Ministry of Power through the REA was commendable and was the beginning of greater achievements in the agricultural sector given the potential for growth. He expressed optimism that the SAPZ, when fully operationalised, will address numerous challenges confronting farmers and other stakeholders in the agricultural sector. He noted that beyond bridging the infrastructure gap in the agric sector, the programme is designed to improve the livelihoods of farmers and people in rural communities in line with the Renewed Hope Agenda. On his part, Permanent Secretary in the Federal Ministry of Power, Mahmuda Mamman, pledged the ministry’s dedication to the actualisation of government’s aspirations in the power sector, stating the ministry’s full commitment to objectives of the collaboration between the REA and SAPZ. In his presentation of REA’s project portfolio across different sectors, Managing Director of the agency, Abba Aliyu, said the organisation has a proven track record of delivering on game-changing projects with 424 completed mini-grid electrification projects and 693 others ongoing across the country. He said the targeted impact of the proposed partnership under the SAPZ programme is 25,000 households, 13 health facilities and directly impacting over 103,000 persons in each designated area. In his remarks, the National Programme Coordinator of the SAPZ, Dr Kabir Yusuf, said the proposed partnership with the REA will address energy supply, which is one of the most critical challenges confronting the successful implementation of the programme across the country. He expressed optimism that the deployment of mini-grids through the proposed initiative led by the REA, the economies of the production centres will improve, while adjourning communities in the SAPZ sites across the country will enjoy more sustainable power supply.