Emmanuel OchayiPresident of the African Development Bank (AfDB), Dr. Akinwunmi Adesina, revealed statistics highlighting Africa’s disproportionate share of global renewable energy investments.
Adesina in an address at the Sustainable Trade Africa Conference in Dubai emphasized how this disparity, particularly in light of the European Union’s (EU) carbon border tax, could adversely affect Africa’s export competitiveness.
“Africa received just $60 billion or 2% of the $3 trillion invested globally in renewable energy over the past two decades,” Dr. Adesina stated, expressing concerns over its negative impact on Africa’s ability to trade competitively with Europe.
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Elucidating on the EU’s carbon border adjustment mechanism, designed to tax products with high carbon footprints imported into the EU, Adesina foresaw potential losses of up to $25 billion annually for Africa.
He stressed that this tax while aiming to promote cleaner production methods, could lead Africa to revert to exporting raw commodities, perpetuating the continent’s de-industrialization.
Referencing a recent Moody’s Analytics report highlighting Africa’s commendable 5.5% default rate on infrastructure investment, Dr. Adesina underscored the continent’s reliability.
He advocated for stronger intra-regional trade, citing the Africa Continental Free Trade Area as an opportunity to boost intra-Africa exports by over 80% by 2035.
Providing additional perspective, the International Renewable Energy Agency (IRENA) previewed its 2023 World Energy Transitions Outlook, emphasizing Africa’s minuscule share in global renewable energy investments.
The preview highlighted that Africa received only 1% of the additional investments in renewable energy made in 2022. IRENA’s Director General, Francesco La Camera, stressed the urgency of redirecting investments to developing nations for a more inclusive energy transition.
Adesina’s address at the conference shed light on Africa’s critical need for increased investment in renewable energy and infrastructure, underscoring the importance of fair and equitable global trade partnerships to facilitate sustainable development across the continent.
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