Green Investments, the New Black for Sustainable Development in Africa

By Busani Bafana

KIGALI, Rwanda (IDN) — Less than ten years to the deadline to meet Sustainable Development Goals (SDGs), Africa is at development cross roads. The big question is how can Africa achieve inclusive and sustainable development to meet the twin agendas; 2030 Agenda and Agenda 2063?

Research assessments indicate that Africa is off the mark on some Sustainable Development Goals but has made great progress on others such as reducing maternal and child deaths and a decrease in the rates of malaria, tuberculosis and HIV.

Yet the African continent needs to escalate progress on halving poverty and hunger, increasing access to health care and tackling high unemployment on the back of the challenges of food insecurity, growing debt and rapid population growth.

Climate change and recently COVID-19 pandemic have thrown spanners in the works, reserving some gains made and making a deliberate action on green growth to accelerate sustainable development a priority.

Early this month (March), Rwanda hosted the 8th Session of the African Regional Forum on Sustainable Development (ARFSD), in Kigali, from March 3-5, 2022. The Forum sought to review and catalyse actions to achieve the SDGs and the 2030 Agenda for Sustainable Development adopted by United Nations Member States in September 2015.

An annual multi-stakeholder platform organized jointly by the United Nations Economic Commission for Africa (UNECA) and host governments in collaboration with the African Union Commission, the African Development Bank and other entities of the United Nations system, the ARFSD had the theme ‘Building forward better: a green, inclusive and resilient Africa poised to achieve the 2030 Agenda and Agenda 2063’. How is green investment a solution to achieving these twin agendas?

“A key message from African leaders is that we need to change the economic model to build more resilience and green investment strategies are part of this change in model of moving away from a simply export driven strategy which is more extractive to the development of sustainable value chains,” Jean Paul Adam, Director of Technology, Climate Change and Natural Resources Division at UNECA, said in an exclusive interview with IDN-InDepthNews.

UNECA notes that for Africa, the annual SDG expenditures will rise to US$154 billion annually as a consequence of the pandemic and by an additional US$285 billion over the next five years to ensure an adequate response to COVID-19.

Admitting that the COVID-19 pandemic has devastated African economies while the Ukraine crisis has amplified the need to adopt sustainable energy options, Adam said green investments will improve energy independence of African countries.

“What we have seen through our green recovery case studies, is that we can get up to 420 percent more gross value addition by investing in the green sector essentially focused around energy, climate smart agriculture and food production,” said Adam.

He added: “With the crisis in Ukraine we have seen that we need a shift from fossil fuels even more. Even the countries that are producers of oil and gas are victims of this yoyo effect and may get high prices and high revenues for a period but there is always a return to normality. Renewable energy is the key to that.”

< Jean Paul Adam, Credit: Busani Bafana

Following are excerpts from the interview:

IDN: What concrete solutions has Africa taken to meet the SDGs on the back of a number of crises like COVID-19?

Adam: We should not be too pessimistic about Africa’s response because what we have seen in the past is that if we go back to the first month of the pandemic most of the analysis, including that done by ECA predicted that Africa will be much harder hit in terms of the outcomes; the number of deaths and the number of severe infections.

African countries have shown remarkable innovation and resilience in terms of the public health response for example, we have managed the crisis in a much more coherence manner than perhaps would have been anticipated when you look at the infrastructure we have. Human resources were well managed in that context and there was a lot of innovation in terms of domestication of PPE equipment, for example. A lot of countries found ways to start building ventilators and there was quite a lot of innovation made to meet the need.

That does not change the fact that Africa has also remained isolated in terms of bigger needs. The mobilisation of vaccines has been limited and this goes to the challenge which is the fundamental for the SDGs and for addressing climate change which is the immediate availability of financing.

When you have great crisis in the world, there usually has been an injection of a large amount of stimulus. Even in this crisis of COVID 19 there has been an injection of over US$20 trillion mobilised globally to respond to the problem. But it has been very much an unequal sharing of these resources in the low-income countries where the spend per capita was only US$57 compared to over US$11 000 per capita in advanced economies. It is difficult to invest in some of the transformational aspect such as energy in one go. There are 23 countries in Africa that have less than 23 percent of the population with access to electricity.

IDN: What do we need to do?

Adam: The need for partnership has been recognised as the first point. A lot of the fragile companies in Africa will require support and aid but there is a lot that can be done by African countries themselves. This was very much the current that was flowing at the ARFSD. The mobilisation of aid from partners is only a small part of it. The main part is how African countries can develop their main markets to finance a lot of their own development.

First there is need for alignment of our existing resources with the priorities of the SDGs and I think Rwanda has set a very positive example in that sense by aligning their budget to the implementation of the SDGs.

Secondly mobilising private sector resources and that includes addressing the structural elements of some projects and ensuring that we have bankable projects that are ready. It is also about looking at the realities of the financial markets.

The Liquidity and Sustainability Facility of the ECA is one means by which we can multiply the investment by the private sector by making it easy for African countries to issue Green Bonds as an example.

We also need to get African institutions such as African banks in precisely these kind of investments that are going to have high multiplier effect and to raise as lot of resources in the short amount of time. At the ARFSD we had the signing of the Memorandum to develop carbon credit financing mechanisms for African countries.

If African countries can tap into carbon credit markets even at a price of about US$50 per tonne, we could raise about US$15 billion per year which could be invested in SDGs and on climate resilience. Carbon credits are one mechanism to raise financing and the critical factor is to raise that additional finance quickly.

IDN: What barriers is Africa facing in accelerating action to meet the SDGs?

Adam: We have to recognise the continuous need to build capacity and that capacity around financing is one for instance. We also need to make sure there is appropriate political will to move forward on a number of initiatives such as the African Continental Free Trade Area (AfCFTA) which is one of the mechanisms that could be an accelerator. There has already been huge political will since 2019 when we have taken great steps forward but there is still some way to go. It requires leadership, perseverance and commitment to deliver on the promise of the AfCFTA.

IDN: Less than ten years to SDGS deadline, are you optimistic Africa will achieve the SDGs?

Adam: Yes. I believe that African countries can turn the tide. Certainly, the current assessment on our performance on SDGs is cause for pessimism because we are not on track but the source for optimism is that if we look at some of the things that have been done in COVID-19 pandemic we can achieve big changes in frameworks that can allow acceleration to happen.

I think the crux of what we need to do is really to allow the means of economic production and consumption to move beyond the commodity extraction and the export model to the sustainable value chains. There is also a move away from laments to be being solutions orientated. There are very deep structural issues of why we have not achieved the SDGs and why we are not on track to achieve them. This assessment has been continuously helpful but the biggest cause for optimism from me, is the focus on African-driven solutions. [IDN-InDepthNews – 30 March 2022]

Image credit: Busani Bafana

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