By Christabel Ligami
Africa faces its first recession in 25 years with output losses due to COVID-19 estimated to be $99 billion, according to the Building Forward for an African Green Recovery report.
This is compounded by climate impacts on economic output projected to cause annual losses of between 3% and 5% of Gross Domestic Product by 2030 under a business-as-usual scenario.
The report by the Economic Commission for Africa (ECA) says that in some cases, this will be as much as 15% of GDP. “With credible data available on the impact of climate change, the ECA Building Forward for an African Green Recovery makes a case for Africa to make informed assessments and take knowledgeable decisions,” says the report.
“For us to build back better we need a lot of energy. The conversation in Africa is about substituting expensive bad fossil fuels with something that is cleaner and cheaper,” said UN Under-Secretary General and Executive Secretary of the ECA, Vera Songwe. “We have to replace fuel-based energies with green and sustainable ones.”
Ms. Songwe noted that with the impact of COVID-19 and its associated economic contractions coupled with the debilitating impact of the climate crisis, Africa’s focus on recovery was even more essential.
“There is an urgent need to roll-out financial aid packages, investments in sustainable infrastructure and structure fiscal stimuli to cushion the expected transition into the green and blue economy,” she said.
According to the report, Building forward African Green Recovery will contribute significantly towards achieving and enhancing sustainable trade within the African Continental Free Trade Area (AfCFTA) over the next decade.
The report seeks to bolster the continent’s valiant quest for the realization of the sustainable development goals (SDGs), attainment of the Paris Agreement’s climate change targets and achievement of the prosperity objectives articulated in Africa’s Agenda 2063.
It seeks to galvanise support for Africa’s Green and Blue Economy strategies and mobilise resources to bolster the continent’s climate adaptation and mitigation measures.
Brian O’Callaghan, Oxford University, Head of the Economic Recovery Project said green investment could rebound growth, expedite development, and bring environmental benefits.
“The economic modelling is based on current technology and pricing, and therefore likely underplays the scale of the long-term opportunities green policies unleash,” said O’Callaghan adding that green investment could bring more jobs and economic gains in the short term, unlock greater development opportunities in the medium to long term, and ensure better environmental and social outcomes
To boost Africa’s green and blue livelihoods recovery programme, the report recommends collaborative partnerships bringing together development partners, multilateral agencies, private sector, international and non-governmental organisations.
“In the immediate this involves a new issuance of special drawing rights to boost liquidity for African countries, and extension of the Debt Service Suspension Initiative (DSSI),” notes the report.
“Opportunities for green and blue bonds using appropriate credit enhancements should also be considered alongside the opportunity for debt restructuring using debt for climate or debt for nature swaps.”
Albert Muchanga, African Union’s Commissioner for Trade and Industry, said Africa has immense renewable energy potential to boost its economic growth through adoption of cleaner energy pathways which are a boost to adaptation and climate mitigation.
Julia Bird from the Oxford University, who collaborated with the ECA in producing the report said; “Africa is endowed with some of the world’s richest biodiversity hotspots, and one of the most important natural carbon sinks, such as the peatlands of the Congo basin which can lock in up to 30 billion tons of carbon.”
“This sequestered carbon is equivalent to 3 years-worth of the whole world’s emissions. Carbon off-sets provide an opportunity for Africa to tap into the value of its natural assets by factoring in carbon sequestration values. Uptake of reliable green energy will support Africa’s economic transformation and clean transition.”
The report indicates that much of global stimulus spending will likely be directed towards investment in long-lived assets, which will impact the environment for years to come and alter the productivity capacity of national economies.
“Investing in transport and energy systems enhance the productive potential of other industries, and unlock opportunities in green tech through creating a critical scale of demand and investing in traditional technologies today risks creating stranded assets in the future like power stations that have lower future economic value as the energy transition takes hold,” says the report
“Natural assets such as forests and mangroves may enhance the wealth of economies in the coming decades as carbon sinks valued by global offsets markets, as protectors of biodiversity, as sources of increased tourism revenues, and as the lungs reducing pollution and enhancing well-being – investing in these today can create jobs & build long-term wealth.”