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Africa demands global finance reforms to spur green growth

NAIROBI: African leaders on Wednesday demanded sweeping changes to the global financial system and urged the international community to back a surge in renewable energy as they wrapped up a landmark climate summit in Kenya. Africa is acutely vulnerable to the growing impacts of climate change, but leaders at the three-day meeting in Nairobi were eager to cast the continent not as a victim but a long-ignored ally in the fight against global warming. “Africa possesses both the potential and the ambition to be a vital component of the global solution to climate change,” said the final declaration from the meeting, on behalf of the African Union.

But, it warned, unlocking green growth across the continent “on a scale that can contribute meaningfully to decarbonization of the global economy” required a massive scaleup in funding. It called on the international community to ease Africa’s crushing debt burden and reform the global financial system to unblock investment in clean energy. Consensus is hard-won across Africa, a diverse continent of 1.4 billion people where some governments are championing a renewable-powered future while others defend their reserves of fossil fuels.

“At the summit, our shared understanding became clear: that Africa is not only the cradle of humanity, it is indeed the future,” said Kenyan President William Ruto, host of the inaugural Africa Climate Summit. Analysts say a united African voice could generate momentum for a series of key gatherings, including the G20 meeting in New Delhi this weekend, ahead of a crunch UN climate summit starting in November. Africa attracted only two percent of global spending on renewables over the last decade, according to the leaders’ statement.

But it said the continent would need a “tenfold increase in the finance capital flowing” into renewables in the next seven years, some $600 billion, to achieve the aim of boosting renewables from 56 gigawatts (GW) in 2022 to at least 300 GW by 2030. Efforts at the summit to up investment in renewables were given a boost on Tuesday, with the United Arab Emirates pledging $4.5 billion to accelerate Africa’s switch to clean energy. Ruto said a tally of funding pledges for the continent had reached $23 billion at the summit, but he did not provide a detailed breakdown.

African potential

Competing visions of the world’s energy future are likely to play out at the COP28 talks in the oil-rich UAE, where the world will take stock of the as-yet-inadequate efforts to slash planet-heating emissions. Ruto has said Africa is well placed to take advantage of the need to move away from carbon-spewing fossil fuels, boasting a young population, vast renewable potential and natural resources.

This includes a large proportion of global reserves of cobalt, manganese and platinum crucial for batteries and hydrogen fuel cells. The International Energy Agency (IEA) says Africa hosts 60 percent of the world’s best solar resources. But there are daunting challenges for a continent where hundreds of millions lack access to electricity.

Global overhaul

African countries, facing mounting debt costs and a dearth of funds, have called for a complete overhaul of the global financial architecture, adding to pressure on the International Monetary Fund (IMF) and World Bank to unlock investment and climate finance. The declaration called for “concrete action” on reforms that lead to “a new financing architecture that is responsive to Africa’s needs”, including debt restructuring and relief. Ruto said it was time to overhaul global financial systems that “perpetually place African nations on the backfoot”.

“We demand a fair playing ground for our countries to access the investment needed to unlock the potential and translate it into opportunities,” he said. Leaders also pressed the world’s wealthy polluters to honor their pledges, including to provide $100 billion a year for clean energy and to help them brace for climate disasters.

In a report released this week Oxfam said the devastating drought in the Horn of Africa as well as floods in South Sudan, have caused losses of between $15 billion and $30 billion in the two years to 2022, or around two to four percent of the region’s GDP. It estimated that between 2021 and 2023 the four countries lost about $7.4 billion in livestock alone. “Millions of already struggling people saw their animals die and lost their ability to grow, sell or eat nutritious food, plunging them into even greater poverty and hunger,” the report said. – AFP

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