Climate Change Is Shortchanging African Economies – Adesina

(AFRICAN EXAMINER) – President of African Development Bank (AfDB), Dr. Akinwumi Adesina has said that climate change is currently shortchanging African economies.

Dr. Adesina made the observation on Tuesday at the opening ceremony of the Bank Annual Meetings holding in Accra, Ghana.

He noted that Africa suffers disproportionately from the negative impacts of climate change, including increased frequency and intensity of droughts, cyclones, floods, compounded by desertification, adding that, the continent suffers $7-15 billion per year in losses to climate change.

According to him, these losses are projected to rise to $40 billion per year by 2030. This he said, is despite the fact that Africa contributes the least to global warming, accounting for only 4 percent of all carbon emissions.

“Africa has no choice but to adapt to climate change. To support the continent in doing so, the African Development Bank has doubled its financing for climate to $25 billion by 2025. Without any doubt, the African Development Bank is the leader on climate adaptation in Africa, and globally. The share of our climate finance dedicated to adaptation is 67 percent, the highest among all multilateral development banks”, he said.

The theme for the Bank’s 2022 Annual Meetings is “Achieving Climate Resilience and a Just Energy Transition for Africa”. The Bank’s annual gathering, is having in-person sessions for the first time since 2019.

In his address, the chief host and Ghanaian president, Nana Dankwa Akufo-Addo spoke of the continent’s ongoing fiscal and socioeconomic challenges and the importance of the AfDB to the continent’s development goals.

Eighteen African economies have faced credit downgrades, amid the headwinds of the impact of the Covid-19 pandemic. The combined effects of the debt situation, rising interest rates and the rising cost of living, according to him, are resulting in severe macroeconomic and financial instability.

“What is clear is that the resulting damage cannot be cured so easily with the limited fiscal tools at our disposal and national policy adjustments. Therefore, I reiterate my call for an elevated role for Africa’s premier bank, the African Development Bank”, he added.

President Akufo-Addo said the Bank is in a position to drive sustained transformation in Africa, noting that with increased financial resources, it could recapitalize key African financial institutions, such as the regional development banks, Afreximbank, Africa Guarantee Fund, Africa-Reinsurance Company and Africa50.

Ghana’s finance minister, Kenneth Ofori-Atta, who is at the end of his term as current chairman of the Bank Group’s board of governors, said the stakes were high and spoke of the risk of a lost decade.

The minister noted that Africa’s economic growth contracted by 3.2 percent in 2020 and debt-to-GDP ratios edged up from 60% to 71.1 percent, Ofori-Atta noted. He however, pointed out that it was not all bad news

“In truth, growth prospects on the continent are not bleak, especially once Africa is provided with the requisite capital to succeed”, he further stated.

Calling the AfDB a ‘reliable partner’ Ofori-Atta said it was necessary to support the Bank in raising competitive financing for its members to tackle the continent’s greatest threats: rising food and fertilizer prices, rising fuel prices, tightening financial conditions and climate change. “We must build from our unique resilience and strengthen partnerships”, he stressed.

The Deputy Chairperson of the African Union (AU), Monique Nsanzabaganwa, who spoke on behalf of the AU Chairman, the Bank for its commitment to the AU’s Agenda 2063.

She said the continent’s access to development building blocks, like better water, sanitation and infrastructure, was vital for its transformation, adding that transformation could only be achieved with an elevated role for the Bank in mobilizing the needed resources.

Earlier in his welcoming remarks, the Bank Group Secretary General, Vincent Nmehielle said the meetings were intended to promote Africa’s resilience to climate challenges.