COM2024: President Mnangagwa calls for innovative green investment strategies to boost Africa’s economic growth

For African countries to benefit from the transition to sustainable green economies, which is estimated to generate $3 trillion by 2030, innovative instruments to foster climate action and address the current debt crisis are needed, experts noted on March 4. Government and institutional representatives at the opening of the Ministerial segment of the 56th Session of the Conference of Ministers of Finance, Planning and Economic Development in Victoria Falls, Zimbabwe made a resounding call for a broad range of innovative instruments such as debt-for-nature swaps, regional blue bonds, regional carbon markets and the use of natural capital accounting. ALSO READ: Reform of global financial architecture on agenda when African ministers meet in Zimbabwe Officially opening the February 28 to March 5 meeting, Zimbabwean President Emmerson Mnangagwa said: “The effects of climate change are increasingly constraining African countries from exploiting their rich natural resource endowments, in a sustainable manner, leading to diminishing returns along economic value chains. The adoption of multi-pronged pathways is thus crucial for inclusive green economies. These must not only aid in poverty eradication, but also safeguard ecological thresholds that support human development, health and well-being. “African countries should therefore innovate ways climate financing mechanisms, proactive mobilize financial resources from both domestic and international sources to facilitate the adaptation.” ALSO READ: Africa needs right policies, infrastructure to prosper from AI, experts say There is need for cooperation and partnership between governments and the private sector, he added, to forge the growth investment strategies for inclusive green economies that benefits “our communities” and stressed the need to focus on a people centred development philosophy that leaves no one and no place behind; and that builds synergies among nations and promotes balanced development across the continent. ALSO READ: Kagame: Now is the time to make international financial system fit for purpose Amb. Claver Gatete, Executive Secretary of the Economic Commission for Africa (ECA), said Africa stands at a pivotal moment, facing many obstacles like food insecurity, fiscal constraints, escalating debt burdens and the adverse effects of climate change. “It is important for countries to accelerate their regional integration initiatives through the full implementation of the African Continental Free Trade Area and the Single African Air Transport Market to drive competitiveness and reduce the cost of doing business across the continent,” said Gatete. He noted that African debt has increased by over 180 per cent since 2010, and 21 countries are now at risk of, or in, debt distress. This is notwithstanding the annual loss of at least 5 per cent of GDP because of climate change. ALSO READ: We cannot ignore climate change challenges, need to respond accordingly - says UNECA boss The global financial architecture, he said, needs to be fixed. To work for everyone and reflect the new dynamics and hopefully the recent membership of the African Union in the G20 will resolve this. “The conversations on governance and conditionalities, no matter how difficult, must be top priority. The ambitious $500 billion SDG Stimulus call by the United Nations Secretary-General is a recognition of how far we must go for justice and equity,” he said adding that the issue of unfair risk perceptions and credit ratings that offer Africa limited borrowing options must be addressed. “We should not accept that only two African countries have investment grade rating, and 22 countries are unrated.” The ECA Executive Secretary noted that countries should focus on deepening domestic resource mobilisation for sustainability. “External borrowing has become costly, unreliable, and untenable. Therefore, reforming our tax systems and derisking the business environment are unavoidable imperatives. There is need to invest in capital market development to provide long-term resources for private sector investment,” he said. Monique Nsanzabaganwa, the Deputy Chairperson of the African Union Commission, said Africa is navigating the delivery of its blueprint agenda 363 in global environments, causing tremendous challenges to African economies, with ripple effects on social political spaces as well. “We need to continue to explore synergies that will pull national, regional and Continental resources through investment in Africa and Stock Exchange in order to secure long term financing of agenda 2063,” said Nsanzabaganwa, adding that countries should enhance the role of the private sector as a source of green financing. Our policies must amplify the impact of capital to ensure that Africa’s private stock of assets contributes to green transition and inclusive development, she said. Mthuli Ncube, Zimbabwe’s Minister of Finance and Investment Promotion, said limited fiscal space, increasing public debt, economic fragility, conflict, insecurity in some parts of Africa, and the negative impact of climate change are some of the biggest challenges the continent is facing today. “Domestic resource mobilization is a crucial source of finance for progress to the establishment of the single African Air Transport market to promote movement of people and goods across Africa,” said Ncube. “Countries should implement the African continental Free Trade Area agreement (AfCFTA) to stimulate manufacturing and increase trade on the continent.” He said that resource mobilization and economic strategies emanating from the conference will help countries strengthen their policies minimize the negative impact of climate change. Rebecca Amuge, the Ambassador of Uganda to Ethiopia and Chair of the outgoing Bureau, said to fund sustainable development objectives, countries must invest in inclusive green transition priorities, harnessing innovative financing mechanisms, and leveraging Africa's abundant natural resources. This necessitates not only the adoption of green policies but also the reform of the global financial architecture to reduce Africa's debt burden and facilitate inclusive economic growth.

News

COM2024: President Mnangagwa calls for innovative green investment strategies to boost Africa’s economic growth