THE International Finance Corporation (IFC), an arm of the World Bank, may have suspended its planned investment of $123 million (about N19.8 billion) in African countries including Nigeria. The investment by the corporation was meant to give the palm oil sector a push, for early revival.
But companies, professional groups and individuals across the continent have reacted to the move by the World Bank, saying the suspension could further aggravate the unemployment situation in su-Sahara Africa.
The groups and individuals from Ghana, South Africa, Zimbabwe and Nigeria who petitioned the World Bank President, Robert Zoellick ahead of the bank’s meetings in Washington DC, United States on Saturday said, the action by IFC could raise the level of poverty and economic dependency, which are contrary to the ideals of the institution.
The letter to the World Bank president, which was made available to The Guardian yesterday, was signed by George Ayittey of Global Cheetah Palm Oil Company, Ghana; Thompson Ayodele of Initiative for Public Policy Analysis, Nigeria; Eustace Davie of Free Market Foundation for Southern Africa, South Africa; Paul Adepelumi of African Center for Advocacy and Human Development, Nigeria; Richard Tren of Africa Fighting Malaria, South Africa; Franklin Cudjoe of IMANI Center for Policy and Education, Ghana; Rejoice Ngwenya of Coalition for Market and Liberal Solutions, Zimbabwe; and Olusegun Sotola of Initiative for Public Policy Analysis, Nigeria.
In their joint protest letter to the World Bank president over the matter, they said the move by IFC to suspend funding of the palm oil sector could have significant effect on palm oil producers and small holders farmers in the Sub-Sahara Africa.
According to them, it could be counter productive for the bank to allow pressure from a small, but vocal collection of environmental groups to undercut its core mission of fighting poverty in developing world.
“We believe the surest way to cut poverty and protect our natural environment is by raising living standards and creating economic prosperity in poor countries. By cutting off much needed funding for palm oil producers, the World Bank threatens to generate poverty and economic dependence, instead of reducing it, a strategy which goes against the very ideals of the institution”.
They therefore, appealed for World Bank’s intervention by taking into consideration the significant damage, which the investment freeze had caused and continue to cause, not only in a highly successful and growing industry in East and West Africa, but to the image of the bank itself among African political and business leaders.
The Director of Initiative for Public Policy Analysis, Ayodele had said that the freezing of support to palm oil producers by IFC would have a major effect on smallholder farmers, who in countries such as Nigeria and Ghana control more than 90 per cent of palm oil production.
He described palm oil as a major agricultural commodity used in an array of foods and nonfood products, including biofuels and cosmetics. Global demand for vegetable oils is expected to increase by more than a third between now and 2017.
“With 90 per cent of palm oil ending up in food, it will play a vital role in enhancing global food security, as the world’s population grows to an estimated nine billion, by 2050”.
“The timing of the Bank’s decision could not be worse. Africa continues to deal with the after effects of the global recession. And it faces a mounting protectionist threat from the European Union in the form of its renewable energy directive, which seeks to keep out African palm oil to benefit European rape seed oil producers”, he added.