Editor’s note: Adjoa Adjei-Twum. She is the founder and CEO of a UK-based advisory firm focused on Africa. New business intelligence Innovation (EBII) Group for Global Investors Interested in Africa and Emerging Markets.
The opinions expressed in this article are hers.
CNN
—
The recently concluded COP27, dubbed the ‘Africa COP’, puts the continent at the heart of the global effort to tackle the causes and effects of climate change.
As negotiations in the Egyptian resort of Sharm el-Sheikh dragged on over the weekend, one of the most difficult elements was the creation of a fund to help the most vulnerable developing countries hit by the climate disaster. We made great progress on one.
The backdrop to COP27 is a series of devastating global weather events, including record floods in Pakistan and Nigeria, the worst drought in 40 years in the Horn of Africa, and severe European heatwaves and hurricanes in the United States. I had a phenomenon.
Loss and damage funds to pay for sudden impacts of climate change that are not averted by mitigation and adaptation are a major obstacle to COP negotiations.
The richest and most polluted countries have been reluctant to agree to the deal, fearing they could be held liable for costly legal claims for climate disasters.
African countries bear the brunt of climate change and I welcome progress here. Continents account for about 3% of global greenhouse gas emissions, according to United Nations Environment Program and the International Energy Agency (IEA).
Climate change is estimated to cost the continent between $7 billion and $15 billion in lost economic output or GDP annually, increasing to $50 billion annually by 2030. African Development Bank (AfDB).
But my joy is contained – the devil, as always, is in the details. As an African diaspora entrepreneur whose work is focused on the impact of climate change on the risk profiles of African financial institutions and sovereigns, I am concerned about how the fund will work, when it will be implemented, and the timing. I’m concerned about the lack of details about scale. I’m afraid these will take years.
During a recent visit to the United States, I discussed reparations with Democratic US Congressman Ilhan Omar. She said it was important for the United States and other countries to make significant investments, which could come in the form of reparations.
She emphasized the importance of consulting affected communities in Africa to avoid exploitation and how countries such as the United States and China should end fossil fuel expansion and replace existing oil, gas and coal with a “just and equitable” approach. ” and talked about the need to phase it out in a silly way. ”
Adaptation is a big challenge for Africa – Estimation of AFDB The continent will need between $1.3 trillion and $1.6 trillion by 2030 to adapt to climate change.
The World Bank’s Africa Adaptation Acceleration Program Global Adaptation Center (GCA) aims to mobilize $25 billion for Africa for projects such as a weather app for farmers and drought-tolerant crops.
Now is the time for African countries to impose climate export taxes on commodities such as cocoa and rubber to help pay for adaptation to climate change. But it is still short of the money Africa needs.
Adaptation is about building resilience and capacity, and I believe governments, banks and businesses must also adapt.
I call on governments, institutions and businesses to do more to attract green finance and make Africa more resilient by improving governance, taxation, anti-corruption efforts and compliance. I’m here.
Sustainability is not a business tax, it is essential for business survival. Only companies that focus on the changing world around us, from regulation to consumer and investor attitudes, will survive the climate crisis.
Companies that ignore this can expect fines, boycotts, and restricted access to funds. Banks will suffer too. As such, the financial sector needs to be more prepared and nimble.
This message will be reinforced next month when we meet CEOs, banking executives and the Central Bank of Nigeria at the 13th Annual Banking Commission Retreat hosted by the Nigerian Banking Commission in Lagos. Its aim is to support the country’s largest banks in navigating new international sustainability rules.
Investment funds are increasingly required to comply with eco-friendly taxonomies – systems that highlight which investments are sustainable and which are not. In other words, banks will only support investments by G20 institutions if they comply with national or supranational rules such as the European Union’s Green Taxonomy.
This not only helps tackle greenwashing, but also helps companies and investors make more informed green choices. Additionally, G20 countries are asking banks to anticipate the risks of climate change lending.
African countries need to implement robust systems to mobilize private capital and foreign direct investment in key sectors. Governments must ensure an enabling environment for increased green investment.
Regulators need to strengthen their capacity to develop and effectively enforce climate-related regulations. Businesses, especially banks, need to strengthen their climate risk management teams, regulatory compliance expertise and readiness of bankable projects for international climate finance. This is the foundation for a successful transition to a low-carbon economy.
Looking ahead, there are other actions we can take. The African Continental Free Trade Area (AfCFTA) – the world’s largest free trade area and a single market with a population of about 1.3 billion people – aims to protect Africa from the adverse effects of climate change such as food insecurity, conflict and economic fragility. You can protect it.
It can lead to the development of regional and intercontinental value chains, trade agreements between Africa, job creation, security and peace. A single market can foster energy-intensive economic growth while keeping emissions low, for example, by developing regional energy markets and manufacturing hubs.
But to accelerate AfCFTA, we need much better pan-African cooperation, like the European Union. I urge governments to cooperate and take prompt and concrete action to ensure the full and effective implementation of the AfCFTA. No time to waste.
This will not be accepted by some African regimes. Because they will be forced to become more transparent and accountable for their finances.
This year’s COP may have been marred by chaos, conflicts between rich and poor countries, and broken billion-dollar promises by developed countries that sparked the climate crisis.
Many observers noted that the final agreement did not include a commitment to phase out or reduce fossil fuel use.
But the deal to create a joint fund for the countries most affected by climate change is important and, as UN Secretary-General António Guterres warned, it was not the time to condemn.
Also, it is not the time to pursue responsibility. This is a wake-up call for African governments, banks, institutions and businesses to come together and respond to the new climate realities.
