Funding, action needed for Africa’s plans
food worth annually. This is in addition to 6.6 million tons of potential grain harvest lost to degraded ecosystems.
Consequently, countries in Africa spend $35bn annually on food imports, which is hardly sufficient, as more than 200 million Africans still go hungry, according to the UN Food and Agriculture Organisation. Yet with appropriate government policies, Africa could recover that $35bn and be able to finance development projects and boost food security.
Africa’s current precarious ecosystem situation can be addressed by promoting environmental sustainability. A good first step is to sustainably harness Africa’s natural capital, advises UNEP.
At the sixth African Ministerial Conference for the Environment, held in Cairo, Egypt, in April, Africa’s environmental experts identified three key ways to leverage natural capital opportunities.
The first involves policies, actions and partnerships at national, regional and global levels designed to reverse current losses from degraded ecosystems, agrovalue chain inefficiencies, illicit financial flows and crimes involving wildlife, logging, fisheries and mining.
By reversing these losses, Africa could save up to $150bn annually.
Sectors such as health care and education, which are in need of annual investments of up to $32bn and $26bn respectively, and infrastructure, for which investments of $93bn are required each year, could potentially benefit.
The second way Africa can sustainably harness natural capital is by allocating, again at national and regional levels, a portion of current natural capital earnings to unlock the potential of natural-capital-based sectors. By so doing, the continent would be achieving the targets of multiple SDGs.
For example, investments in ecosystem-based, adaptation-driven agriculture and using clean energy for processing and other commercial chains can potentially support sustainable agro-industrialisation.
Clean energy can boost sustainable agro-processing in rural areas and, combined with affordable financing and market accessibility, enhance farmers’ incomes, boost food security by up to 128 percent and create up to 17 million jobs along the entire value chain. This is in addition to boosting an agro-sector expected to be worth $1 trillion by 2030, according to the World Bank.
Investments in natural-capital-based sustainable agro-industry will contribute towards the first SDG (poverty eradication), the second SDG (an end to hunger), the seventh SDG (affordable and clean energy) and the eighth SDG (sustainable economic growth and employment), as well as promoting food security and improved nutrition.
Investments can enhance climate adaptation and the health of ecosystems, and produce healthier food even as clean energy options reduce emissions and pollution – all of which would contribute to the SDG three (good health and well-being for all) and SDG 13 on climate action. Healthy ecosystems would contribute to SDG 15 (protecting life on land).
The World Bank reckons that a 10 percent increase in crop yields in Africa would translate to approximately a 7 percent reduction in poverty through agricultural growth, which is at least two to four times more effective in reducing poverty than growth in other sectors.
The third way Africa can leverage natural capital opportunities is by targeting policies and actions to enable value addition of its natural capital exports, instead of exporting raw materials. This would enhance earnings. Policies prioritiSing investment in rural transport and energy infrastructure to achieve sustainable agro-industrialisation is a good starting point, experts believe.
Experts continue to praise key elements of the Paris climate agreement, the SDGs and the AU’s Agenda 2063. What is lacking, however, are policies to ensure those elements are part of individual countries’ development frameworks and, most importantly, that their implementation is financed.
Without such policies and financing, it may be difficult to achieve modern, climate-friendly and efficient food systems, and, by extension, inclusive economic growth.
With regard to the critical financing need, one area of intense discussion is how to deal with illicit financial flows, mainly attributable to Africa’s natural capital. According to the Organisation for Economic Co-operation and Development (OECD), financial aid spent on improving tax administration could substantially increase tax revenue for African countries. For instance, a project assisting Kenya’s tax administrators returned a massive $1 650 for every $1 extra invested, while a programme in Mozambique was able to increase short-term revenues by 350 percent.
Huge potential
The potential is huge, yet currently just 0.07 percent of OECD assistance to poor countries is used to improve tax systems. Building capacity of Africa’s negotiators with multinational companies and improving regulatory oversight in tax administration could help deal with illicit flows and recoup funds for sustainable development.
African countries should make it a priority to implement the 2015 recommendations of the AU high-level panel on illicit financial flows headed by former South African president Thabo Mbeki. These include taking measures to deal with organised crime, including environmental crimes (which make up about 33 percent of all organised crimes) and the public sector corruption that plays a key role in facilitating these outflows.
Additionally, unnecessary tax expenditures such as incentives for natural-resource exploration constitute significant revenue losses, up to 4 percent of GDP, in addition to providing loopholes for fraud. Up to 65 percent of oil subsidies in Africa benefit the richest 40 percent of households and feed corrupt cartels, according to the African Development Bank.
Africa’s huge natural resources can turn the dream of a prosperous continent into a reality. Countries need to act urgently and strengthen the governance structure and to enact and implement appropriate policies. The challenge is to make actions speak louder than all the fine words.