British International Investment (BII) has said that about 39% of businesses in Africa have been affected by flooding. BII stated this in its 2022 Emerging Economies Climate Report.
According to BII, firms/companies that have experienced flooding range from electric utility firms to agricultural companies, banks, and real estate businesses. In the report, flooding was the most frequently reported physical climate event affecting businesses in emerging economies in Africa. Other events include drought, water scarcity, extreme heat, wildfire, and extreme wind.
Biggest risks: According to the report from BII, when respondents were asked the area of their business value chain most affected by flooding, operations were identified as the worst hit area at 40% for both African and Asian organizations. Those who consider flooding from rivers and surface water as a result of more extreme weather events as the biggest physical climate risk to their business are about 33%. Meanwhile, those who consider sea level rise increasing coastal flooding are at 2%.
Impact on business growth and viability: 58% of respondents in Africa told BII that they are more than concerned that climate change could impact their organization’s viability and investment portfolio over the next 5 to 10 years.
According to the BII report, those living in emerging economies are among the most vulnerable to the effects of climate change but are the least responsible for causing it. Respondents, both in Africa and Asia, want more support in helping to address the challenges that the changing climate brings with it.
The Nigerian context: Flooding in 2022 has taken over 600 lives and displaced over 1.2 million people, submerged homes, businesses, and farmlands, thereby posing risks to food security, disease outbreaks, and increased unemployment and economic challenges. As already highlighted by the BII report, flooding in sub-Saharan Africa affects agricultural production.
During the 2022 IMF/World Bank annual meetings in Washington, USA, IMF said Nigeria faces an increased risk of inflation due to the shutdown of agro-businesses and farmlands affected by flooding in 2022.
Mai Farid, a senior economist at IMF, said agricultural production in flooded areas in sub-Saharan Africa is going to drop, which will put even further pressure on food prices.
She said: “In addition, the floods have affected some of the transportation networks, which makes it even harder to transfer food into the country or even out. So, we do recognize that these are incredibly difficult contexts to address.
“However, our work does point towards establishing a telecommunications system that gives farmers the ability to be aware of an upcoming climate change forecast that would kind of predict a flood or a drought; all those things will help them raise their level of preparedness.
“Rebuilding in a better way is something that countries need to take into account since climate change is not going anywhere and is inevitable.
“Making sure that infrastructure is climate resilient that you can actually withstand that next shock, flood barriers come to mind, given the countries that we mentioned; these are expensive and this is where more efficient expenditure as well as making sure that you have platforms to perhaps attract climate finance.”