Bolster Africa to resist financial shocks, say African leaders

THE African Development Bank Group’s 2023 Annual Meetings officially opened on Tuesday, with a clarion call by African leaders, together with the Bank’s President, Dr Akinwumi Adesina, to ramp up financing to meet Africa’s urgent climate action goals.

In his welcome remarks, Adesina drew attention to the vast gap in resources for climate action. He said while Africa’s cumulative climate financing needs had been estimated at US$2.7 trillion between 2020 and 2030, climate financing resources were only flowing to Africa in trickles. “Africa receives only 3 percent of global climate finance, of which 14 percent is from the private sector, the lowest in the world,” Adesina said.

This year’s Annual Meetings, under the theme “Mobilizing Private Sector Financing for Climate and Green Growth in Africa,” bring together the Bank’s Board of Governors representing its 81 shareholder countries, development partners, as well as representatives from the private sector and civil society organisations. In his opening remarks(link is external), Egyptian President Abdel Fattah El-Sisi said the complex challenges facing countries around the world, and especially those in Africa, needed what he described as creative solutions.

“This requires non-traditional ideas to explore financing options, to contribute to pushing the wheel of much-needed projects, particularly in the fields of addressing climate change challenges and sustainable development,” President El-Sisi said.

Citing statistics from the African Development Bank and the United Nations, he noted Africa required US$144 billion annually to address the repercussions of the COVID-19 pandemic, US$108 billion to finance adaptation projects and upgrade infrastructure, and US$200 billion to achieve the Sustainable Development Goals.

“The functions of the current edition of the Annual Meetings…represent an outstanding opportunity to share knowledge and expertise and to provide the necessary technical support to address the implications of climate change, “President El-Sisi said.

The Union of Comoros President and Chairperson of the African Union Azali Assoumani argued that the slowdown of GDP growth rates across Africa required “significant resources for the countries most exposed to the impact of climate change.” Yet, there are still “opportunities for green economic growth, if we bring our private sector on board,” Assoumani said.

Moussa Faki Mahamat, the Chairperson of the African Union Commission, expressed agreement with the timely choice of the Annual Meetings’ theme. He stressed the devastating impact of climate change on Africa, in the form of floods and droughts, which has curtailed the continent’s GDP growth.

In unison with other speakers, African Development Bank Group Board of Governors Chairman and Governor of the Central Bank of Egypt Hassan Abdalla, said the theme “covers all of the issues of regional and global significance, particularly the importance of harnessing capital to address climate change.”

“Achieving our economic objectives is contingent on strength of institutions headed by the African Development Bank, which is playing a pioneering role in development financing of economies,” Abdalla said.

Adesina said the African Development Bank has shown leadership with innovative solutions for its member countries. He cited the African Adaptation Acceleration Program which aims to mobilise $25 billion for climate adaptation in partnership with the Global Center on Adaptation. According to Adesina, Africa is well placed to attract billions of dollars in private investment for greening global transport systems, as the world moves to transition to electric vehicles. “That’s because Africa has 80 percent of the global deposits for platinum, 50 percent of cobalt, 40 percent of nickel, and substantial deposits of lithium,” he said.

Adesina said Africa must set up itself to manufacture lithium-ion batteries to tap into the over $388 billion market for electric vehicles. “And for good reason: the cost of establishing a lithium-ion precursor factory in Africa is three times less expensive than in US or China,” he said.

The 58th Annual Meetings of the Board of Governors of the African Development Bank and the 49th Meetings of the Board of Governors of the African Development Fund, will run from 22-26 May in the Egyptian coastal town of Sharm El-Sheikh. — AfDB