African Countries Face Shocks, Urgent Climate Action Needed: ADB Bank Report
African countries face COVID-19, disrupted supply chains due to Russia-Ukraine conflict, and tightening global financing, per African Economic Outlook 2023, writes Charles Mkoka.
Sharm El Sheikh, Egypt—African Economic Outlook 2023: COVID-19, Russia-Ukraine conflict, and tightening global financing challenge African countries, per African Development Bank report, writes Charles Mkoka.
These shocks, coupled with the threats posed by climate change, have resulted in a reduction of the continent's real GDP growth from 4.8 percent in 2021 to 3.8 percent in 2022.
However, despite these setbacks, African economies continue to display resilience, with average growth projected to stabilise at 4.1 percent in 2023–24.
The report, unveiled in the Egyptian resort city of Sharm el-Sheikh, highlights significant downside risks to the growth outlook.
These risks include subdued global growth, which weighs on Africa's exports, as well as persistently tight global financial conditions that exacerbate debt servicing costs.
The report also warns of significant losses and damages due to frequent extreme weather events, which further intensify fiscal pressures.
Additionally, the prolongation of Russia's invasion of Ukraine is increasing global uncertainty, and persistent disruptions to global supply chains pose ongoing challenges. Elevated geopolitical risks due to upcoming national elections in some countries are also identified as contributing factors.
Professor Kevin Urama, the African Development Bank's Vice President in Charge of Economics, stressed the urgency of fast-tracking climate action and green transitions to drive the continent's inclusive and sustainable development.
Speaking at a press conference following the report's release, Urama, flanked by senior members of the bank, pointed out the glaring loopholes in global climate finance.
He highlighted the exposure of populations on the continent to more shocks, particularly from extreme weather events such as floods and droughts, making them increasingly vulnerable.
"We must underscore the urgency of increasing reforms in global financing as a result of climate change. Africa emits less than 4 percent of greenhouse gases. Why is the financing not going to the continent's adaptation initiatives as part of loss and damage?" asked Urama, while calling for global-level reforms to address the issue.
Vanessa Ushie, the Acting Director of the African Development Bank's African Natural Resources Management and Investment Centre, responded to the shocks faced by African countries, citing the need to address deforestation and land degradation.
Ushie emphasised that without landscape restoration and ecosystem protection, local communities would be more susceptible to the effects of climate change.
"Without landscape restoration and protecting ecosystems, local communities will be more vulnerable to the effects of climate change," explained Ushie.
Urama urged African countries to adopt climate-smart development strategies and ensure the construction of climate-resilient structures capable of withstanding extreme weather events.
"There is a need to take a new approach to development that is climate resilient. We must climate-proof development projects, as the effects of climate change are here to stay," offered Urama, providing advice on the way forward.
The 2023 African Economic Outlook's theme revolves around mobilising private sector financing for climate and green growth in Africa, underscoring the importance of involving the private sector in addressing climate challenges and promoting sustainable development across the continent.