Africa losing 5% of GDP annually to climate-related disruptions – UN

African economies lose up to 5% of Gross Domestic Product on average annually because of climate-related disruptions, the United Nations Economic Commission for Africa says.

Decrying the adverse impact of climate change across Africa, the UN agency said the daily realities grow worse for the continent, adding that while African countries require adequate, predictable and accessible finance, the structure of existing climate finance continues to perpetuate inequities.

UN Under-Secretary-General and Executive Secretary of ECA, Claver Gatete, made the observation while speaking at the Africa Day, Side Event on the Margins of the ongoing COP29 in Baku, Azerbaijan.

The event which took place on Wednesday at the Africa Pavillion, with the theme: “Scaling up Financing for Climate Adaptation and Green Growth in Africa.” was attended by heads of state and government, including the President of the Republic of Kenya, Dr. William Samoei Ruto, President of the Islamic Republic of Mauritania and Chairman, African Union (AU), Mohamed Ould Cheikh AI- Ghazouani, President of the Islamic Republic of Mauritania and Chairman of AU, as well as the Chairperson of Africa Union Commission, Mr. Moussa Faki Mahamat.

Mr. Gatete further noted that African nations are currently off track on all measures and targets, from financing, to adaptation to resilience building.

“Today, much of the available climate funding is disbursed as loans, and not as grants, adding to Africa’s already high debt levels. We should not continue to settle for this way of doing business,” he said.

Fixing the challenge

To address our climate and economic challenges, he recommended that Africa must leverage its critical minerals to drive a green economic transformation, adding that Africa’s wealth of clean energy sources, combined with its critical minerals, has the potential to power a climate-resilient future.

“The battery and electric vehicle industries – expected to be worth trillions by 2050 – demonstrate Africa’s strategic role in the global green transition. Through initiatives like the Democratic Republic of Congo and Zambia’s collaboration on a Special Economic Zone for battery value chains, Africa can lead in clean energy production, create jobs and promote sustainable economic growth,” he explained.

The ECA boss also stated that it is imperative to enhance Africa’s carbon capture potential through structured, nature-based solutions, noting that Africa’s ecosystems, particularly the Congo Basin, hold vast capacity for carbon storage, which could mobilize up to $82 billion per year through high-integrity carbon credits.

“Yet, to ensure that Africa’s carbon markets benefit African economies and communities, we need a robust and transparent system. And this is why the ECA is supported initiatives like the Congo Basin Climate Commission’s carbon market protocols to build a market that both safeguards Africa’s interests and contributes to global climate goals.

“We are replicating these efforts in the Sahel region and African island states. Properly harnessed, these assets can secure fair compensation for Africa’s vital ecosystem services,” he stressed.

In addition, he said African nations must commit to establish the New Collective Quantified Goal (NCQG), a goal that is based on real needs, which is estimated at US$1.3 trillion for Africa.

Mr Gatete equally pointed out that available financing continues to fall short, and that public finances must be complemented by private funds to build resilience, protect diversity, and foster climate-responsive development.

He also harped on the need to work assiduously towards accelerating the clean energy transition for Africa’s long-term economic resilience and prosperity.

“The transition to renewable energy, Excellencies, is unstoppable. Already, electricity from new wind and solar installations is more cost-effective than fossil fuels in many regions. As the world moves toward a green economy, Africa has a chance to position itself at the forefront.

“With coordinated policies and investment, Africa can become a global hub for renewable energy, ensuring that our economies benefit from the transition while safeguarding the environment.

“Finally, is the need for urgent, decisive action to limit greenhouse gas emissions and avoid the irreversible impacts of climate change. Africa, despite its minimal contribution to global emissions, is committed to doing its part. However, we call upon global partners to match this commitment with actionable support, because delaying increases risks for us all,” he said.