There’s no question but that economic development in Africa is throwing up new environmental challenges, but African policymakers also have an opportunity to show that growth and their efforts to combat poverty can go hand-in-hand with protecting the environment. Donald Kaberuka argues that developing a green African economy needs more financial support, but improved natural resource management should be at the heart of this too.
A recent study by the OECD of economic and environmental trends around the world predicts that over the next two decades most African countries will see growth averaging about 5% yearly. Of course this will increase pressure on the environment, and another study by the UN’s Environment Programme (UNEP) suggests that the problem will be compounded because Africa’s productivity will decline unless it manages its natural resources more sustainably.
Kaberuka points out that there has been some progress on recycling, waste management and clean energy production, but much more needs to be done. African countries pinning their hopes on mineral resources to fuel economic growth will need to manage this very carefully. Once natural capital starts to be depleted, human capital must be built up to replace it, so some of the tax and other revenues from resource exploitation must be channelled into investment. The Extractive Industries Transparency Initiative which Paul Collier focused on in the Spring 2011 Europe’s World will also be essential to getting corruption under control.
Mining can generate hazardous waste that pollutes water even after the ore is removed, so a regulatory regime governing mine closures is essential. Building roads to reach mine sites also gives easier access for illegal activities like slash-and-burn agriculture, so mining revenues should be used to strengthen controls.
The flaring of gas contributes to greenhouse gas (GHG) emissions, yet using that gas could alleviate energy shortages in many parts of Africa. And leaks from Nigeria’s offshore oil wells have in recent decades amounted to many times BP’s Deep Horizon accident in the Gulf of Mexico.
Ten sub-Saharan countries have large oil and gas resources, generating royalties and taxes that are projected to total some $4 trillion over the next 20 years. Tackling energy poverty is therefore well within these countries’ means, but major institutional reforms are needed first. Private investment will not on its own allow the energy sector to develop cleanly, because what’s also needed is improved revenue management and the development of more efficient infrastructure. Africa uses only a small fraction of its enormous hydropower potential, and the key is to create regional power grids so that countries generating excess electricity can export it.
Farm innovation, on which Kaberuka rightly focuses, is essential to sustainable growth and poverty reduction. Exploiting niche markets for organic food could also be a growth area for Africa, playing to its strengths with more labour-intensive agricultural techniques.
Although Africa could indeed become an environmental pioneer, most African countries’ dependence on natural resources, the distances of rural communities from urban centres and farmers’ vulnerability to climate change means that environmentally sustainable growth needs increased investment rates of at least 1-2% of GDP. Most African governments are unable to mobilise that much cash, and private sector investment has been hampered by political instability and exchange rate fluctuations. Official development assistance (ODA) is the main source of financing in many countries, but it has been concentrated on projects with a high commercial potential. That means that public-private partnerships and greater international assistance are the two most viable solutions, and only by pursuing them can Africa improve its environmental management.
Kenneth G. Ruffing is a former Co-ordinator for the African Economic Outlook firstname.lastname@example.org