Introduction
The global COVID19 pandemic has put Africa into its first recession in three decades. This recession has disproportionately affected women-led businesses and exacerbated the existing structural vulnerabilities of African countries. The continent has shown remarkable resilience and innovation in responding to this unprecedented pandemic. Despite the robust responses, the pandemic has rolled back many years of development gains on the continent and put at serious risk the chances of many Africans making progress towards the achievement of their SDGs. Many African countries were already in, or approaching debt distress with widening fiscal deficits. The pandemic has worsened the situation and puts many African countries in a situation of serious lack of liquidity, making it more difficult to mobilise needed investments to rebound out of the triple health, economic and environmental crises arising from the compounding of the COVID-19 pandemic and the climate change emergency that was already costing Africa on average 5% of their GDP in economic losses.
However, as the world shifts from the emergency response to recovering from the pandemic, we have an opportunity to change our course towards a sustainable, inclusive, and resilient development pathway by aligning recovery investments with climate strategies. There are opportunities for a green recovery which could catalyse the recalibration of Africa’s development model in favour of building resilience to climate change and developing sustainable value chains anchored in effective deployment of the continent’s abundant renewable energy resources, building of sustainable infrastructure, and renewal of Africa’s natural capital, anchored on the need for a just transition towards higher climate ambition. Africa’s Green Stimulus Programme1, led by the African Union Commission and adopted in January 2021, as well as the Africa Green Recovery Action Plan2 have underlined Africa’s ambition for coming out of the COVID-19 pandemic stronger, more prosperous and more resilient to climate change impacts, while providing huge opportunities for mitigation of climate change. Alongside the impacts of the pandemic, the pressure of public debt is increasing for African countries. This heightens the challenges for an inclusive recovery, and for addressing the gender inequalities that have been amplified during the pandemic. The associated Green Recovery Action Plan prioritises resource mobilisation for the green recovery. The opportunities for a green recovery, based on green investments, include more employment and value addition, as well as entrepreneurship entry points for women and youth.
A recent report by the UN Economic Commission for Africa and Oxford University on a green recovery for Africa shows the enormous benefits that could be realised if African countries are supported to mobilize and prioritize stimulus packages on green investments3. For example, a case study on the Republic of South Africa shows that green investments in renewable energy, sustainable transport solutions, and nature-based rehabilitation could deliver 250% more jobs and 420% more value added in the economy compared to traditional fossil-fuel investments. For the Democratic Republic of the Congo investment in renewable energy, nature-based solutions and improved urban transport solutions result in 130% more jobs and 280% more value added in the economy.
However, African countries face some serious constraints in mobilizing resources to invest in a green recovery and climate adaptation. These include reduced revenue generation, rising debt burdens, and the flight of capital away from what are perceived to be riskier African markets. Initiatives such as the Debt Suspension and Servicing Initiative (DSSI), as well as additional concessional resources from multilateral development banks and bilateral donors have been important in helping low-income countries. But there is an urgent need to find innovative ways of reducing the burden States and leveraging limited public resources to mobilize private sector finance to invest in climate action and green recovery. Financing that has been made available has been mobilised slowly relative to the scale of the emergency, with 56 billion USD committed in 2020 but only 35 billion disbursed by the end of the year. The allocation of USD 650 billion of SDRs may potentially provide important additional resources to invest in a green recovery. For this to be effective, there is need for innovation, speed, and scale4. African countries will need strong support to actualize a green recovery and build resilient economies. This requires an enabling environment, including through capacity building on green recovery for government institutions to plan, design, finance, implement and evaluate green recovery projects.
Objective
Session 2 will bring together senior policy makers, development partners, the private sector and civil society to explore innovative ways in which a green recovery and enhanced climate action could be actualised as scale and speed to strengthened African economies and build resilience. The session will also showcase African-led innovative initiatives for leveraging limited public resources for green and climate resilience investments on the continent. The session will also discuss strategies that can be deployed to unlock climate finance ahead of COP26; draw attention to the enormous benefits of investing in green recovery actions for African member states; explore resilient development pathways by aligning COVID-19 recovery investments with climate strategies; and interrogate the concept and implementation of a just transition agenda that delivers for people, planet, and prosperity in Africa, while emphasizing the inclusion of an effective strong gender component in any green recovery package to secure a sustainable and inclusive recovery.
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