BY RICHARD MUNANG AND ROBERT MUGENDI
THE SOUTHERN TIMES, MARCH 27, 2016
September 2015 saw Africa’s Heads of States and Governments join their counterparts from across the globe to unanimously adopt the Sustainable Development Goals (SDGs) at the 70th UN General Assembly.
This signaled a common global intent to transition into economic, social and environmental progress in the next 15 years: a united, mutually collective front against hunger, malnutrition, poverty, unemployment, disease, climate change, low agricultural productivity, degraded ecosystems and social inequity, among the notable challenges facing Africa.
The SDGs dovetailed into the Africa Agenda 2063. Achieving the SDGs in a fast, efficient, impactful and lasting way is not predestined and will require innovative action from all fronts. This imperative is most critical on the financing front. There is consensus that financing the SDGs and Agenda 2030 will require trillions of dollars – at least $1.5 trillion extra annually over the MDGs, and public international financing alone is inadequate.
Astronomical investments needed to achieve the SDGs in Africa
For instance, Africa’s energy sector needs investment of $55 billion annually until 2030 to achieve universal access to electricity. Cumulatively, it is projected that the region will require investment of up to $490 billion by 2040 for new electricity generation capacity alone, and 31% more for an aggressive focus on renewables. On climate change, Africa needs to invest between $50-100 billion annually by 2050. On infrastructure, the region needs nearly $500 billion, translating toover $93 billion annually until 2020 for infrastructure development.
Education and healthcare is equally costly. UNESCO estimates that Sub Saharan Africa (SSA) will need to invest up to $26 billion annually to achieve universal education by 2020. In healthcare, Africa, which lags behind the rest of the world in all the indicators of health and where few African countries are able to spend the WHO recommended $35 per capita for minimum healthcare, needs to invest a minimum of USD 31.5 billion annually..
Declining official development assistance (ODA)
ODA to Africa is declining. In 2013, aid to the African continent had fallen by 5.6%. In 2012, aid to Africa had fallen by 9.9%, relative to 2011. Indications are that this downward trend may persist as traditional partner governments tighten budgets. Earlier pledges from the G8 have also not materialized, and where they come through Africa gets only a fraction of the money. For instance, a 2005 pledge by the G-8 to increase aid by $50 billion by 2010 (half of which was destined for Africa) did not materialize. Instead, aid increased by $30 billion and only USD 11 billion went to Africa.
Going forward, it will be more strategic for Africa not to rely on external development financing alone. Relying on international public finance alone to finance development is a risky strategy and Africa needs to look for alternative sources, drawing domestically. Africa, already facing financing challenges, has recognized this and acknowledged in a number of regional blueprints principally the AU Agenda 2063, the AMCEN Cairo Declaration, and the second Africa Adaptation Gap report(AAGR2). Global processes including the 3rd Financing for Development Outcome (FfD3) concur and buttress this critical perspective.
Africa’s natural capital financial worth
According to the African Development Bank, about 30% of the world’s mineral reserves are in Africa. The continent has 8% of world’s natural gas reserves, 12% of the world’s oil reserves, 40% of its gold, and 80 – 90% of its chromium and platinum. Africa’s natural capital has underpinned the continent’s economy and continues to represent a significant development opportunity for her people. In 2012, natural capital accounted for 77% of total exports and 42% of government revenues. Over 70% of the SSA population depends on forests and woodlands for livelihood. Land in Africa is an economic development asset as well as a socio-cultural resource. Going forward, achieving long term sustainable development and poverty alleviation in Africa relies on the sustainable and optimal management of its natural capital.
Africa’s natural capital losses
Even with this significant contribution, a substantial share of this natural capital is lost. The High Level Panel report on Illicit Financial Flows from Africa documents that Africa has lost amounts significantly exceeding $50 billion annually through IFFs. Cumulatively, this report observes that over the past 50 years, Africa has lost amounts estimated to exceed $1 trillion, a sum roughly equivalent to all of the official development assistance received by the continent during the same timeframe.
The 2014 Africa progress report gives further credence to these colossal figures. It notes that Africa’s natural capital is also at the heart of illicit global trade that is costing the continent in excess of $50 billion annually or a colossal 5.7% of its annual GDP. On ecosystems and food security, the fact that 180 million people are relying on depleted soil to grow their food is a key reason why sub-Saharan Africa lags behind other developing regions in meeting its food security goals. The economic loss associated with land degradation in sub-Saharan Africa is estimated at$68 billion per year.
Rwanda’s plans to light the country with solar energy plans, is just one of the initiative that supporters admire. Implementing the SDGs and Agenda 2030 in Africa
Africa should prioritize reversing natural capital losses and appropriately prioritizing what is currently earned to catalyze implementing the SDGs. For example, reversing land degradation will not only enhance food production, but could potentially inject $68 billion annually into the economy for re-investment in healthcare and education.
On current earnings, a portion of the 42% average revenue that African governments earn directly from natural capital through export of timber, fisheries, minerals etc., could through policy actions be re-invested to boost productivity of highly potent and inclusive sectors.
For example, investing in Ecosystem Based Driven-Agriculture and its linkage to commercial value chains, especially clean energy to catalyze rural agro-processing, affordable financing, and accessible markets, can enhance not only food security, but enhance farmer incomes while creating up to 17 million jobs. EBA Driven-Agriculture can potentially combat climate change, while also enhancing the health of ecosystems.
An example of a policy imperative could be ensuring a percentage of natural capital export earnings is dedicated to programmes that enhance agro-productivity through access to affordable financing of agro-value chains, targeted rural infrastructure development especially clean off-grid & mini-grid solutions to catalyze rural agro-industry, among others.
It is documented that enhancing productivity of the agro-sector in Africa could potentially catalyze achievement of all the SDGs. Leveraging natural capital in the above ways will require cross-cutting partnerships forged between government, the private sector and the non-governmental sector.
It will require governments to create an enabling policy environment, the private sector to inject sustainable commercialization and capital, researchers and academia to inform government of optimal policies, and development partners to facilitate capacity building and technology transfer.
• Dr. Richard Munang is Africa Climate Change & Development Policy Expert., while Robert Mgendi is the Adaptation Policy Expert