Regardless of its $6.2Trn pure wealth, Africa stays “inexperienced wealthy however money poor.”
Projections present that had carbon sequestration alone been accounted for, Africa’s nominal GDP in 2022 may have elevated by $66.1Bn.
In Europe, carbon costs can attain as excessive as $200 per tonne, but in Africa, the identical credit are traded for as little as $3 to $10 per tonne.
On the twenty ninth Convention of the Events (COP29) in Baku, Azerbaijan, African leaders are pushing for a good valuation of the continent’s pure riches—spanning huge forests, carbon sequestration capabilities, and ecosystem companies.
They’re calling on authorities to issue them into the calculation of Gross Home Product (GDP). This daring transfer goals to redefine wealth on a world scale by integrating the immense worth of Africa’s pure property into financial frameworks.
In a pivotal communique, African heads of state have cited the invaluable contributions of their ecosystems to international public items.
“We’re doing helpful work for Africa and the remainder of the world,” famous President Denis Sassou Nguesso of the Republic of Congo, underscoring the necessity for pure capital to be acknowledged as integral to an financial system’s wealth.
The worth of Africa’s pure wealth
Africa’s pure wealth is estimated to be price trillions of {dollars}—far exceeding the GDP of lots of its nations. A report by the African Improvement Financial institution Group (AfDB) cites this disparity: in 2018, Africa’s GDP stood at $2.5 trillion, a determine dwarfed by its estimated $6.2 trillion in pure capital.
Regardless of this wealth, the continent stays “inexperienced wealthy however money poor,” as AfDB President Dr. Akinwumi Adesina identified.
Preliminary estimates point out that had carbon sequestration alone been accounted for, Africa’s nominal GDP in 2022 may have elevated by $66.1 billion—a sum better than the mixed GDP of 42 African nations.
The query, subsequently, isn’t whether or not Africa is rich, however why this pure wealth isn’t mirrored in international financial measurements.
Carbon credit: A double-edged sword
Whereas Africa’s forests play a crucial function in absorbing international carbon emissions, the continent continues to face exploitative practices in carbon buying and selling markets.
On the ongoing COP29 talks, leaders raised issues over what Dr. Adesina described as a “carbon seize,” the place African nations promote carbon credit at a fraction of their price.
In Europe, carbon costs can attain as excessive as $200 per tonne, but in Africa, the identical credit are traded for as little as $3 to $10 per tonne.
This gross undervaluation not solely shortchanges African nations but additionally strips them of sovereignty over lands allotted for carbon sequestration.
The AfDB President warned that this follow represents a “lose-lose proposition” for Africa, each economically and environmentally.
Learn additionally: Local weather change finance, accounting for “inexperienced wealth” high agenda for Africa as COP29 opens
The worldwide alliance for pure capital accounting
To sort out these inequities, African leaders proposed forging a world alliance with different areas, together with Latin America, Asia, and the Caribbean, to champion the inclusion of pure capital in GDP metrics.
President Paul Kagame of Rwanda strengthened this imaginative and prescient, stating, “We aren’t asking for handouts, however for the world to pay for one thing that has great worth for all of us.”
Kenyan President Dr. William Ruto, represented by Prime Cupboard Secretary Musalia Mudavadi, shared comparable sentiments, noting that recognizing Africa’s inexperienced wealth may unlock monetary flows and enhance credit score scores, driving much-needed funding into African economies.
A daring agenda for the longer term
The leaders’ communique additionally units the stage for presenting a complete report on pure capital accounting on the African Union’s 2025 summit.
This report will function a blueprint for integrating pure capital into GDP calculations, offering a pathway for African nations to reclaim the worth of their environmental property.
The African Improvement Financial institution Group has been a key participant in advancing this agenda. Its report, Measuring the Inexperienced Wealth of Nations: Pure Capital and Financial Productiveness in Africa, outlines actionable steps for integrating pure capital into financial productiveness metrics.
The financial institution’s revolutionary strategy to financing and technical help underscores its dedication to serving to African nations understand the true worth of their inexperienced wealth.
Learn additionally: Worsening monetary disaster: Africa’s pure assets traded for loans
Africa’s path towards financial justice
The discussions at COP29 mark a crucial juncture in Africa’s quest for financial justice. For many years, Africa’s contributions to international sustainability have gone unrecognized, its assets undervalued, and its economies constrained by outdated metrics of progress.
By advocating for the inclusion of pure capital in GDP calculations, African leaders are difficult the worldwide group to rethink how wealth is measured.
This effort isn’t just about Africa—it’s a name for a extra equitable international financial system that values sustainability and acknowledges the intrinsic price of pure ecosystems.
As President Sassou Nguesso aptly put it, this initiative is about accelerating “the popularity of the environmental dividend” for Africa and the world.
The inclusion of pure capital in GDP calculations may remodel Africa’s financial narrative. By valuing its pure riches, the continent can entice investments, enhance credit score scores, and be certain that its assets are leveraged for the good thing about its individuals.
COP29 was greater than a convention; it was a platform for Africa to claim its function as a world chief in sustainability. Because the continent works towards realizing this imaginative and prescient, the world will watch intently—and hopefully, be aware of the teachings Africa is instructing in regards to the true that means of wealth.
