The eighth Babacar Ndiaye Lecture held on the 4 Seasons Lodge in Washington D.C., on 26 October 2024, under-scored the necessity for African nations to strike a stability between short-term improvement imperatives and long-term local weather objectives.
Beneath the theme “Saving Lives As we speak versus Saving the Planet for the Future: Can the AfCFTA Resolve the Local weather Change Dilemma?” discussions centred on how the African Continental Free Commerce Space (AfCFTA), Africa’s most formidable commerce initiative, might function a car for financial progress and environmental sustainability, positioning the continent as a pacesetter within the world inexperienced transition.
The Lecture drew a distinguished viewers of policymakers, lecturers, monetary consultants and local weather advocates.
Talking about Dr. Babacar Ndiaye in his opening remarks, H.E. Professor Benedict Oramah, President and Chairman of the Board of Administrators of Afreximbank Group, mentioned “Dr Babacar Ndiaye was most involved by the long-term threats posed to humanity by local weather change. He as soon as mentioned, “Local weather change is the best menace to improvement, significantly in Africa, the place tens of millions of individuals rely upon the setting for his or her livelihoods … Africa’s financial transformation can not occur with out addressing local weather change.”
Dr. Ndiaye’s reflection on the impression of local weather change was spot-on and intellectually deep.” However, “disappointingly, the worldwide debate on local weather has been a lot centered on emissions discount with the query of decreasing its impression on Africa and different growing international locations all the time decreased to a footnote. A name for Africa to decarbonise, when the continent has not even carbonised, poses a severe menace to the socio-economic improvement of a gas-rich continent that has at the very least 600 million individuals with out electrical energy.”
The African Continental Free Commerce Space Settlement “is seen as a potent technique of decreasing carbon emissions as it’s serving to to cultivate industrial actions and minimise the carbon emissions brought on by delivery of commodities to far-away lands for worth addition and reshipping to Africa and elsewhere. We consider that The AfCFTA might provide a pathway to a simply transition, enabling native industrial worth addition whereas defending the planet.”
Professor Yemi Osinbajo, SAN, GCON, the Instant Previous Vice President of the Federal Republic of Nigeria, delivered a strong tackle titled “Sustainable Infrastructure for Africa’s Future: Harnessing Innovation and Partnerships.” He spoke passionately about some great benefits of the AfCFTA and its potential to remodel Africa’s commerce panorama, scale back carbon emissions and foster innovation in inexperienced industries.
“There are two apparent benefits to a totally operational AfCFTA.The primary is that 42% of African international locations, apart from North Africa, now have laws prohibiting the export of uncooked ores or minerals earlier than being processed. This laws offers African international locations the good thing about jobs and revenues from native processing and manufacturing.
“The second benefit of the AfCFTA is that delivery is a serious supply of carbon emissions. Beneath present commerce practices, a big share of African uncooked supplies are exported to different areas, the place they’re processed or manufactured into completed merchandise, often utilizing fossil gas energy sources, earlier than being shipped again to Africa for consumption. This cycle contributes to larger emissions and constitutes a loss for African international locations that don’t reap the worth chain acquire from beneficiation. Intra-African commerce in completed items will considerably scale back this large trigger of world emissions,” he mentioned.
The discount of emissions by intra-African commerce has been the topic of a number of empirical research. Professor Osinbajo referred to a current ECA/ CEPII examine titled “Greening the African Continental Free Commerce Space Settlement’s Implementation” printed in December 2023, which discovered, inter alia, that implementing the AfCFTA can enhance intra-African commerce by 35% in 2045 whereas growing GHG emissions by lower than 1%, in comparison with no AfCFTA or local weather insurance policies.
These research don’t think about utilizing renewable power sources within the processing and manufacturing of traded items, an assumption of the Local weather Constructive Progress paradigm, which might once more considerably scale back emissions.
Professor Osinbajo cited mining bauxite in Guinea for instance. If Guinea, which has 25% of world deposits of bauxite, processed the bauxite it mines to aluminium with renewable power in readiness for export, Guinea might save the world 335 million tonnes of carbon dioxide equal (CO2e) per yr, which is roughly 1% of world emissions, and create 280,000 jobs and generate $37 billion of further income. If it chooses to promote the aluminium inside Africa, it can once more save the massive delivery value to international locations hundreds of miles away.
A Bloomberg examine accomplished for the African Growth Financial institution (AfDB) in 2021 on the manufacture of battery precursors discovered that manufacturing battery precursors within the Democratic Republic of the Congo (DRC), which has loads of lithium and cobalt, is 3 times cheaper than manufacturing it within the US, EU and China. Manufacturing within the DRC would lengthen worth chain alternatives to different African international locations, they would want manganese from Zambia, Tanzania, Gabon and South Africa to contribute to its capability to supply these battery precursors. Manufacturing utilizing renewable power might considerably scale back the price of manufacturing. Africa’s considerable renewable power has very low seasonality or intermittency, making it doable to reliably present a renewable baseload to energy steady industrial manufacturing.
“The AfCFTA empowers African international locations first so as to add worth to supplies and specialize in areas of nationwide comparative benefit, and likewise to work collectively to commerce extra beneficially with the remainder of the world,” mentioned Prof Osinbajo.
He futher mentioned that “Most African international locations rely upon fossil fuels for his or her power wants and for fossil gas wealthy African international locations, that is additionally a serious supply of export earnings and financial revenues. Ostensibly in line with their internet zero obligations, there was a rising development amongst improvement finance establishments to withdraw from fossil gas funding. These actions embody the World Financial institution’s resolution to stop funding for upstream oil and gasoline improvement in Africa and the restrictions on financing downstream gasoline improvement by the European Union, the UK, and the US. Clearly, the implications of those actions are dire, the place there aren’t any instant various sources of energy and the price of the transition to cleaner fuels could also be prohibitive. Some research present that divesting from fossil fuels might scale back GDP by as a lot as USD$30 billion for Nigeria, USD$22 billion for Algeria, and USD$19.3 billion for Angola.”
H.E. Dr Rania A Al-Mashat, Minister for Planning, Financial Growth and Worldwide Co-operation, Arab Republic of Egypt mentioned that whereas the “African continent is the least answerable for carbon emissions, it has the largest burden by way of financing local weather change for developmental wants – equivalent to meals and water safety, and entry to power.
She known as for higher collaboration with nationwide and worldwide stakeholders “We have to work collectively; we have to convey the experiences from different locations in order that Africa can push ahead with respect to improvement and sustainable financial progress.”
In her Goodwill Message, Ms. Amina J. Mohammed, Deputy Secretary-Common of the United Nations and Chair of the United Nations Sustainable Growth Group, spoke in regards to the quickly closing window to stop the worst impacts of local weather change. She addressed the truth that many African international locations are mired in debt, exacerbated by prolonged crises with little entry to long-term concessional financing to spend money on sustainable improvement.
“With satisfactory entry to monetary assets at an affordable value, renewables can dramatically enhance economies, develop new industries, create jobs and drive improvement, together with by reaching the over 600 million Africans residing with out entry to energy,” mentioned Ms Mohammed.
She additionally confused the significance of prioritising inclusive insurance policies that empower ladies and youth when constructing climate-resilient economies.
“By harnessing the collective would possibly of the AfCFTA, Africa could make strides in addressing each local weather motion and sustainable improvement by selling regional integration and fostering inexperienced industrialisation.
“The AfCFTA will help construct climate-resilient economies whereas creating jobs, decreasing poverty and strengthening meals safety.”
The eighth Babacar Ndiaye Lecture additionally bolstered Afreximbank’s dedication to management in financing sustainable infrastructure and commerce insurance policies throughout the continent.
Distributed by APO Group on behalf of Afreximbank.
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Vincent Musumba
Communications and Occasions Supervisor (Media Relations)
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Concerning the Babacar Ndiaye Lecture
The Babacar Ndiaye Lecture is an annual occasion designed to foster dialogue round Africa’s improvement challenges and discover sensible options by means of coverage, commerce and diplomacy.
The Lecture honours Babacar Ndiaye, a former President of the African Growth Financial institution, for his visionary management in advancing Africa’s financial progress.
Afreximbank has hosted this Lecture yearly since 2017 in honour of the late Dr. Babacar Ndiaye, the fifth President of the African Growth Financial institution. Dr. Ndiaye reworked the Financial institution throughout his decade-long management and was additionally instrumental in establishing a number of different enduring Pan-African establishments, together with Afreximbank, Shelter Afrique and the African Enterprise Roundtable.
About Afreximbank
African Export-Import Financial institution (Afreximbank) is a Pan-African multilateral monetary establishment mandated to finance, facilitate and promote intra and extra-African commerce. For over 30 years, the Financial institution has been deploying revolutionary devices to ship financing options that assist the transformation of the construction of Africa’s commerce, accelerating industrialisation and intra-regional commerce, thereby boosting financial enlargement in Africa. A stalwart supporter of the African Continental Free Commerce Space (AfCFTA), Afreximbank has in partnership with the African Union Fee and the AfCFTA Secretariat launched the Pan-African Cost and Settlement System (PAPSS) that was adopted by the African Union (AU) because the fee and settlement platform to underpin the implementation of the AfCFTA settlement. The AfCFTA Secretariat and the Financial institution have created a US$10 billion Adjustment Fund to assist international locations to successfully take part within the AfCFTA.
On the finish of December 2023, Afreximbank’s complete belongings and ensures stood at over US$37.3 billion, and its shareholder funds amounted to US$6.1 billion. Afreximbank has funding grade rankings assigned by GCR (worldwide scale) (A), Moody’s (Baa1), Japan Credit score Ranking Company (JCR) (A-) and Fitch (BBB). Afreximbank has advanced into a gaggle entity comprising the Financial institution, its impression fund subsidiary the Fund for Export Growth Africa (FEDA), and its insurance coverage administration subsidiary, AfrexInsure, (collectively, “the Group”). The Financial institution is headquartered in Cairo, Egypt.