Category: English

Source: The Conversation – Africa – By Chinomnso Onwubiko, Consultant, University of Cape Coast

Rivers State on Nigeria’s coastline has some of Africa’s largest mangrove ecosystems. The Niger Delta itself contains the third-largest mangrove forest in the world. These trees support fisheries, biodiversity and the livelihoods of thousands of people.

The Niger Delta region is also the heart of the country’s oil and gas industry. Decades of oil exploration and production have altered its landscape. Pipeline construction, dredging (when sand is dug out of the ground), oil spills and gas flaring (burning) have degraded mangrove habitats. In addition, local communities use mangrove wood for fuel, construction and income generation.

The resulting damage to the environment – including mangrove forests – has weakened the natural coastal defences that once protected communities from flooding, erosion and storms.

Mangroves grow in shallow water. They act as biophysical barriers that dissipate wave energy, trap sediments and reduce the intensity of storm surges.

I am an environmental scientist working in coastal zone management, flood risk assessment and nature-based solutions for climate adaptation. My research focuses on how ecosystems help reduce coastal flood risk. In particular, I have looked at how natural ecosystems, particularly mangroves, contribute to coastal resilience and community protection in vulnerable coastal regions.

In my research I used ecosystem modelling tools to evaluate how changes in habitat condition influence exposure to flooding and erosion in coastal communities. The model scored and compared areas of healthy, continuous mangrove cover with areas where mangroves were degraded or cleared.

It showed that mangrove ecosystems provide a significant natural defence against flooding in the coastal communities of Rivers State. Areas with good mangrove cover scored lower for vulnerability.

This comparison confirms what local residents have long observed: that the loss of mangrove forests has led to more frequent and severe flooding events.

The study underscores the urgency of integrating nature-based solutions into local and national flood management policies.

Mangroves provide significant cover

The Niger Delta has recorded varying amounts of oil spill incidents since the 1970s. These have affected land, water and mangrove forests.

My study applied the InVEST Coastal Vulnerability model developed by the Natural Capital Project. The model uses information about a range of variables to generate exposure scores for places along the shoreline. The variables include shoreline type, wind and wave exposure, and the distribution of populations and infrastructure along the coast.

The score shows how vulnerable a place is to flooding. This allows direct comparisons between areas with intact mangroves and those that have lost mangroves.

A key insight from the modelling exercise was that the relationship between mangrove extent and flood protection is not simple. Narrow, fragmented mangrove belts offer limited protection. Wider and denser belts of mangroves have a disproportionately powerful effect. They substantially reduce wave energy and flood inundation.

This finding aligns with similar studies from south-east Asia and the Caribbean. These report that wider mangrove zones provide exponentially greater flood mitigation benefits.

The study further highlights the socio-ecological implications of mangrove degradation. The decline of mangrove cover driven by fuelwood harvesting, land conversion, oil infrastructure and pollution has eroded biodiversity and fisheries productivity. It has also reduced the resilience of human communities.

In places where mangroves have been lost, residents rely on infrastructure like sandbags or embankments. But these provide limited and temporary relief. Communities are becoming dependent on costly engineering measures rather than sustainable, ecosystem-based solutions.

What needs to be done

Restoring and protecting mangroves is a cost-effective way of reducing disaster risk. Natural coastal buffers reduce exposure to flooding and erosion. They also support livelihoods through fisheries, fuelwood and ecotourism. Mangroves also store carbon.

All these functions make them a cornerstone of climate adaptation in environments like the Niger Delta.

Urgent action is required to protect and restore mangrove ecosystems.

Rivers State could be a model for other coastal regions facing similar challenges. The model produces scenarios of “with mangroves” and “without mangroves”. This enables:

• consequences of the presence or absence of mangroves to be seen

• the production of maps. These can show areas where mangroves provide the most – and the least – support. So in real time, it shows areas where reforestation or afforestation efforts can be focused on.

These can be replicated in other coastal areas.

Mangrove conservation must be part of formal coastal zone management and spatial planning policies. This means recognising what mangroves can contribute to disaster risk reduction, urban development and climate adaptation strategies at state and national levels.

Large-scale mangrove restoration programmes must begin in degraded areas, especially those that have already experienced severe flooding. Restoration efforts should focus on reestablishing wide belts of trees with dense coverage, using native species and community-led approaches that ensure local participation and ownership.

Government and oil companies operating in the Niger Delta must do more to stop pollution, dredging and land-use practices that destroy mangroves. Aquaculture, eco-tourism and mangrove-friendly fisheries should be promoted to reduce dependence on unsustainable wood harvesting.

Capacity building and public awareness campaigns are essential to empower communities to manage mangrove ecosystems sustainably. By combining local knowledge with scientific evidence, policymakers, researchers and communities can develop effective, nature-based solutions that reduce flood risk while enhancing ecological and socio-economic resilience.

– Mangrove loss is making the Niger Delta more vulnerable: we built a model that can track how the forests are doing
– https://theconversation.com/mangrove-loss-is-making-the-niger-delta-more-vulnerable-we-built-a-model-that-can-track-how-the-forests-are-doing-267384

Source: The Conversation – Africa – By Iwa Salami, Professor of Law, University of East London

A notification popped up on my LinkedIn the other day. Africans were doing a traditional celebratory dance at the Africa Stablecoin summit in Johannesburg.

The picture gave me a sinking feeling.

Why? While stablecoins can advance financial inclusion in Africa, could this celebration mark the potential transfer of monetary sovereignty from African economies to the economy issuing the most coveted currency-denominated stablecoin?

Stablecoins are crypto-assets or digital currencies designed to maintain a stable value, typically by being pegged to a reference asset such as a national currency (like US dollars), a commodity (like gold) or a basket of assets.

The use of stablecoins in Africa is on the rise, particularly in Nigeria, South Africa and Kenya. This rise is driven by currency volatility, inflation and limited access to stable foreign currency through traditional banking. Those problems prompt some people to adopt US dollar-denominated stablecoins for saving, hedging and remittances.

Part of their appeal is that they can be moved across borders more quickly, cheaply and efficiently than conventional assets. In South Africa, a well developed regulatory and financial infrastructure has increased institutional confidence, expanding stablecoin use beyond retail into business payments, remittances and other business-to-business transactions.

Their stability is usually achieved through reserves, collateral, or algorithmic mechanisms that prevent large price swings.

My book, Financial Technology Law and Regulation in Africa, looked at their operation as a crypto-asset in African states. I raised concerns about their potential impact on emerging economies, including African countries, in 2019 and 2020. A recent International Monetary Fund paper has echoed these concerns.

The journey so far

Stablecoins emerged in 2014 to reduce the volatility of crypto-assets for crypto-holders who wanted to cash out of a high-value crypto-asset before it crashed. Crypto-asset values crash easily because they are highly speculative, sentiment-driven, and can be sold instantly at scale, allowing fear to trigger rapid sell-offs.

The most popular ones are US dollar-denominated USDT and USDC issued by private companies Tether and Circle, respectively. However, stablecoins were unregulated for about 10 to 11 years before the EU Markets in Crypto-assets (MiCA) regulation in 2024 and the US Genius Act in 2025. During this period, there were no disclosure requirements governing these crypto-assets.

As not all are subject to regulation, criticisms abound regarding the quality and opaque nature of the assets backing them and their robustness to withstand redemption runs or large cash redemption by holders of stablecoins.

These criticisms arise as it is often unclear exactly how liquid, safe, and transparent the assets backing stablecoins are, raising doubts about whether unregulated issuers could meet large, sudden redemption demands without stress. This matters because the stablecoin market is worth approximately US$300 billion, so a loss of confidence could trigger mass redemptions and cause disruption well beyond the crypto-asset sector.

Potential problems

The rise in the use of stablecoins poses a risk of dollarisation, as US dollar-denominated stablecoins account for 99% of the stablecoin market. Dollarisation is the excessive use of the dollar in local African economies. It could be a threat to African states’ monetary sovereignty and drive capital flight from African economies.

To avert this problem, African authorities and central banks would first need to be prepared to impose restrictions or limits on the amounts of these US dollar or foreign-denominated stablecoins that can circulate within their economies at any given time. This is to prevent the threat to monetary sovereignty.

Secondly, African economies should also be prepared to put in place sound policy frameworks through which they can build credibility for their currencies and, therefore, avoid the risk of dollarisation.

Thirdly, they can consider launching their own stablecoins. This can be in the form of a local currency stablecoin or a regional stablecoin. To prevent capital flight from the economies, these stablecoins can be backed by a commodity or a basket of commodities, from Africa’s wealth of natural resources and minerals such as precious stones, gold, diamonds, crude oil and cobalt. To have a global edge, a dollar value can be derived from these commodities.

Since the proposed African backed stablecoin would be a local currency with a US dollar value, it could be used to settle domestic, regional and global transactions without the need for US dollars, whose backing assets are held outside the country and in the US.

Fourthly, they could also consider issuing their own retail central bank digital currency, as this would have exactly the same effect as fiat but in digital form. It would have the same credibility status as fiat, which would need to be built to avoid the risk of dollarisation.

The risks

As US dollar-denominated stablecoins account for 99% of the stablecoins market, the rise of their use in Africa indicates stablecoins have heightened dollarisation.

Dollarisation already exists and is widespread across Africa. It ranges from partial and informal to deep and systemic, depending on country conditions, but stablecoins accelerate and reinforce it. Traditional dollarisation (people and firms informally using US dollars for savings and trade) remains constrained by physical cash, bank access and foreign exchange controls.

Stablecoins make dollar-denominated liquidity instantly accessible on a mobile phone, bypassing banks, foreign exchange restrictions and domestic currency infrastructure. They become “digital dollars”, circulating outside the supervisory perimeter of central banks.

The US Genius Act brings issuers under US regulatory oversight. It guarantees that US dollar-denominated stablecoins will be safe, liquid and institutionally backed, making them more attractive than many African domestic currencies, especially in inflationary environments.

Consequently, what was once an informal hedge becomes a formal, globally credible digital alternative to local currency, accelerating capital flight, weakening deposit creation, and undermining domestic monetary policy.

This has direct monetary sovereignty implications for countries such as Nigeria and Kenya. In Nigeria, persistent foreign exchange shortages and naira volatility have pushed households and small enterprises into Tether (USDT) and USD Coin (USDC) as working capital and savings instruments.

Post-Genius Act, these instruments will become more institutionally robust, increasing dependence on US-dollar-based payment and settlement systems located and governed outside the country’s financial system and reducing the Central Bank of Nigeria’s ability to influence liquidity, lending and inflation.

In Kenya, where digital finance is already deeply embedded through M-Pesa, US dollar-stablecoins offer a hedge against the shilling, bypassing local credit creation and weakening the Central Bank of Kenya’s monetary transmission mechanism.

In both cases, the US Genius Act effectively shifts monetary authority away from African central banks and towards US regulators and private issuers – not by design, but through market incentives. Stablecoins thus do not merely mirror existing dollarisation; they legalise it at scale, embedding it into Africa’s digital financial systems.

There is also the risk of capital flight from African economies to the jurisdictions where the denominated stablecoins are backed.

In summary, stablecoins can truly advance financial inclusion in Africa, but heavy reliance on foreign-denominated stablecoins risks deepening dollarisation and weakening monetary sovereignty.

Next steps

To deal with these risks, African economies need stronger policy frameworks to build currency credibility and reduce the risk of dollarisation. This means that the fiscal deficit must be contained – meaning that governments must not spend far more than they earn. Current account balances must be managed, and foreign exchange, bank and corporate sector balances must be closely monitored.

My take on this issue is that central banks should be at the forefront of these developments, and this could also involve issuing their own central bank-issued tokenised money or digital currencies. This can co-exist alongside stablecoins rather than allowing privately issued, foreign-denominated stablecoins to become the dominant digital currency in circulation in a state.

So, while the dance at the stablecoin summit was commendable, I am concerned that only one dimension, looking at the benefits of stablecoins to facilitate payments and financial inclusion, is being put forward.

Policymakers must clearly articulate the implications of foreign-denominated stablecoins and prepare appropriate responses.

– Stablecoins are gaining ground as digital currency in Africa: how to avoid risks
– https://theconversation.com/stablecoins-are-gaining-ground-as-digital-currency-in-africa-how-to-avoid-risks-271359