By ANTONIO M.A. PEDRO
The confluence of shocks – the cascading impact of the Covid-19 pandemic, the war in Ukraine and severe natural disasters – have eroded Africa’s development gains, resulting in a staggering 149 million previously non-poor Africans now facing the risk of falling into poverty.
The growing number of new poor and vulnerable people is making it harder to close the gap between the rich and the poor. Moreover, Africa currently accounts for the largest share of the world’s poor. This inevitably has a far-reaching impact on achieving the sustainable development goals and the vision of the Africa we want.
The crisis, however daunting, presents an opportunity for the African ministers of finance, planning and economic development assembling in Addis Ababa from 15-21 March 2023, to make concerted efforts on providing concrete solutions. The theme, fostering recovery and transformation in Africa to reduce inequalities and vulnerabilities, should yield long term actions to move the continent forward on a path of prosperity.
First, there is need for real action on reducing the high cost of trade. This can ease the burden on access to affordable goods for poor, hard-hit households that are losing out on health, education, and meaningful opportunities. It is also time to expedite the implementation of the African Continental Free Trade Agreement (AfCTA) as a powerful lever for poverty reduction.
The AfCFTA’s promise cuts across all economic sectors, presenting a new pathway for broad-based growth. In the agri-food sector, which is critical to overcoming vulnerabilities associated with food insecurity for the over 300 million affected Africans, ECA estimates show that the sector will yield additional US$ 43.3 billion in trade revenue by 2045 if the agreement is expedited.
Additional opportunities abound in sectors such as pharmaceuticals, vehicles and transport equipment, metals, and textile, apparel and leather products.
Second, climate action must be mainstreamed in policy development and implementation. We are living through the devastating impact of climate events that have led to the migration and displacement of some 85 million people in the region.
Increasing temperatures have already contributed to a reduction by a third in average agricultural productivity growth, while the continent’s 38 coastal countries are facing climate-related threats to their blue economies.
The climate crisis is not a fringe issue. It accentuates poverty through its impact on lives, livelihoods, and economies. Governments can finance development through innovative green financing, such as investing in nature-based sequestration which can provide up to 30% of the world’s sequestration needs. At 120 USD per tonne of carbon, up to US$ 82 billion per year can be mobilized from nature-based carbon credits in Africa.
