Green initiatives have vital role in Africa's economic growth

President William Ruto with his Nigerian counterpart Bola Tinubu and other leaders during COP28 in Dubai, UAE, on December 2, 2023. [PCS] One of the most frequently parroted narratives when it comes to rolling out any green initiatives in Africa is that doing so puts much-needed growth at risk. It must have cropped up again at COP 28, which ends today in the United Arab Emirates (UAE). Historically, it hasn't been one without merit. African countries are, after all, reportedly responsible for just four per cent of global emissions. Given that they've contributed so little to the climate crisis, the argument goes, why should they be expected to slash their emissions, potentially at the cost of growth and development, even as developed countries continue to push large amounts of greenhouse gases into the atmosphere? Such arguments miss out on one big point, however. And that's that green initiatives, incentives, and policies don't have to come at the cost of development. The opposite is true. The right green projects, particularly in the renewable energy space, can fuel growth and drive development. Moreover, such projects can sit at the heart of green communities that fuel further, sustained growth. Africa's big, green opportunity Before looking at how that might happen, it's worth looking at how big some of the green opportunities in Africa are. Take the agricultural sector, for example. According to a study by the UN Environmental Programme (UNEP), adopting things like organic farming, precision agriculture, and agroforestry could help enhance productivity, minimise human impacts on nature, and avoid food insecurity. The study additionally reveals that there is a $1 trillion (Sh153 trillion) opportunity in digital agribusiness technologies across the continent and combating soil erosion and nutrient depletion can unlock $62.4 billion (Sh95.4 trillion) in value annually. Perhaps the biggest green opportunities for the continent, however, lie in renewable energy. One obvious opportunity lies in the solar space. Africa is, after all, home to 60 per cent of the world's best solar resources but just one per cent of installed capacity, according to the International Energy Agency. In addition to the cheap, renewable energy that making more extensive use of those resources would offer, launching extensive solar programmes would also unlock immense value in areas like skills development and job creation. When those solar resources are combined with other untapped renewable energy sources such as wind, hydro, biomass, and geothermal resources, the potential value is even greater. According to UNEP, they could increase the continent's GDP by 6.4 per cent from 2021 to 2050 and generate anywhere from 100 per cent to 400 per cent of current global energy demand. Even with Africa's predicted population growth, that means there's a significant opportunity for Africa to become a net exporter of clean energy. There are also significant opportunities to build the circular economies that many believe are crucial to humanity's future survival and welfare. Circular economy initiatives could help reduce plastic waste and pollution, unveil new forms of sustainable packaging, and enhance recycling, including for eWaste. Fortunately, more and more roleplayers across Africa are realising the positive impact that green initiatives, policies, and practices can have. More than 40 African states, for instance, were revising their national climate plans in 2022 to be more ambitious and outline greater commitments to climate adaptation and mitigation measures. Additionally, several major African cities have embraced sustainability. The Arcadis Sustainable Cities Index 2022, which measures urban sustainability across cities, ranks Nairobi at 96 out of 100 global cities. The country's Vision 2030 roadmap has sustainability at its core in making the country achieve middle-income status in the next seven years. Further down in South Africa, Cape Town has been a leader in exploring biofuels for transport, renewables in public facilities, and preparing its power grid for a surge in electric vehicles. Abidjan's Cocody suburb, meanwhile, has committed to cutting its carbon emissions by 70 per cent by 2030 through the extensive use of solar power and energy-efficient stoves. While such commitments and initiatives are vital, governments cannot fund them on their own. It's estimated that Africa requires $2.8 trillion (Sh428.4 trillion) to fulfil its commitments under the Paris Agreement. That makes the role of investors critical. But those investors cannot simply provide funding and hope for the best. Communities must always be at the heart of their investments, with their long-term welfare given equal footing at least to profit. To do otherwise is to risk failed projects, lose community buy-in, and ultimately give in to the narratives that claim green projects don't benefit ordinary Africans. As one of those investors, we recognise that understanding and responding to climate change is a journey that requires ongoing learning, training, and a revision of our current investment process and ESG screening processes to ensure climate change is not only priced into our investments but also factored into our impact monitoring and management process. As investors in Africa, we need to be agile and equip our clients with the necessary skills and resources to implement climate adaptation and mitigation measures that ensure the sustainability of their businesses and create the desired impact. Ultimately then, it should be clear that there's little merit to arguments that Africa cannot develop unless it uses the same carbon-intensive methods as other global regions. A sustainability-focused shift can unlock massive amounts of value that drive growth and development. And, if the green projects driving that shift are community-oriented, the impacts can be even bigger.

Green initiatives have vital role in Africa's economic growth

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Green initiatives have vital role in Africa's economic growth

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