<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246272359-820x547.jpg" alt="" class="wp-image-422421" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246272359-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246272359-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246272359-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246272359-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246272359-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1246272359-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The logo the World Economic Forum (WEF) inside the Congress Centre in Davos, Switzerland, on Monday, Jan. 16, 2023. The annual Davos gathering of political leaders, top executives and celebrities runs from January 16 to 20. Photographer: Stefan Wermuth/Bloomberg via Getty Images</figcaption></figure>



Davos, Switzerland, 16 January 2023&nbsp;– A new report launched today at the World Economic Forum Annual Meeting 2023 shows how “early mover” countries can accelerate the food systems transformation. The report,&nbsp;<a href="https://www.weforum.org/reports/food-nature-and-health-transitions-repeatable-country-models">Food, Nature and Health Transitions – Repeatable Country Models</a>, offers insights into the actions and investments that can accelerate a country’s transition towards food systems that deliver a stronger economy, better livelihoods for a more inclusive set of people, greater nutritional security and improved health, while causing a lower impact on the climate and nature.



“Transforming food systems provide healthy and nutritious diets and dignified jobs for farmers and producers. This report shows how economic development with environment protection supports communities in climate adaption and mitigation efforts,” said Gim Huay Neo, Managing Director of the World Economic Forum’s Centre for Nature and Climate.



The report, written in collaboration with Bain &amp; Company, presents “repeatable models” from seven “early mover” countries in Africa, Asia, the Americas and Europe whose performance has been comparatively strong and whose examples and lessons are widely relevant. Their stories of transformation identify common, repeatable elements, including the most critical actions and investments for driving change and how they should be coordinated.



“Depending on the country context, different pathways could be adopted to transform our agrifood systems for improved food security and nutrition and assuring sustainability,” said Maximo Torero Cullen, Chief Economist at the UN Food and Agriculture Organization (FAO). “Scaling up climate resilience and strengthening our food environment to promote healthy diets&nbsp;are two key interventions with positive impacts on food security,&nbsp;nature and health.” “When food fails, everything fails,” added Geraldine Matchett, Co-Chief Executive Officer and Chief Financial Officer of Royal DSM, and Co-Chair of the CEO Alliance on Food, Nature and Health. “We must work to transform our food systems to be resilient, sustainable and healthy.” A number of countries, including Ghana, India and Viet Nam, have been able to evolve their food systems to improve a broader set of outcomes by unlocking the potential of small and medium-sized enterprises, particularly those that are farmer-allied and operating in local food chains. Countries can also use innovation to improve productivity, sustainability and nutritional outcomes, as demonstrated in Algeria, which has improved food security in the face of significant constraints on water availability, while Viet Nam has sustainably intensified its rice production. Farmers are more likely to adopt new practices if the economics work in their favour, according to the report, but making this happen requires action from many stakeholders. Examples in Canada and New Zealand illustrate how to scale adoption of nature-positive and climate-smart food production, particularly focusing on the case for an economic advantage for producers. Each of the “early mover” country profiles in the report show how multiple actors and concurrent levers, across sectors, interact and coordinate to enable large-scale transformation over time. Collectively, they demonstrate the potential for these levers – if applied in tandem and with greater urgency – to accelerate country-led food systems transformation. About the World Economic Forum Annual Meeting 2023 The World Economic Forum&nbsp;<a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023">Annual Meeting 2023</a>&nbsp;convenes the world’s foremost leaders under the theme&nbsp;Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information, please click&nbsp;<a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023">here</a>.



“Depending on the country context, different pathways could be adopted to transform our agrifood systems for improved food security and nutrition and assuring sustainability,” said Maximo Torero Cullen, Chief Economist at the UN Food and Agriculture Organization (FAO). “Scaling up climate resilience and strengthening our food environment to promote healthy diets&nbsp;are two key interventions with positive impacts on food security,&nbsp;nature and health.” “When food fails, everything fails,” added Geraldine Matchett, Co-Chief Executive Officer and Chief Financial Officer of Royal DSM, and Co-Chair of the CEO Alliance on Food, Nature and Health. “We must work to transform our food systems to be resilient, sustainable and healthy.” A number of countries, including Ghana, India and Viet Nam, have been able to evolve their food systems to improve a broader set of outcomes by unlocking the potential of small and medium-sized enterprises, particularly those that are farmer-allied and operating in local food chains. Countries can also use innovation to improve productivity, sustainability and nutritional outcomes, as demonstrated in Algeria, which has improved food security in the face of significant constraints on water availability, while Viet Nam has sustainably intensified its rice production. Farmers are more likely to adopt new practices if the economics work in their favour, according to the report, but making this happen requires action from many stakeholders. Examples in Canada and New Zealand illustrate how to scale adoption of nature-positive and climate-smart food production, particularly focusing on the case for an economic advantage for producers. Each of the “early mover” country profiles in the report show how multiple actors and concurrent levers, across sectors, interact and coordinate to enable large-scale transformation over time. Collectively, they demonstrate the potential for these levers – if applied in tandem and with greater urgency – to accelerate country-led food systems transformation. About the World Economic Forum Annual Meeting 2023 The World Economic Forum&nbsp;<a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023">Annual Meeting 2023</a>&nbsp;convenes the world’s foremost leaders under the theme&nbsp;Cooperation in a Fragmented World. It calls on world leaders to address immediate economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. For further information, please click&nbsp;<a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023">here</a>.

Preparations Ahead of The World Economic Forum (WEF) 2023

Countries That Tackle Food Crisis Can Boost ‘Jobs, Health and Nature’ and Meet Net-Zero Goals

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Chido-Munyati-Panel-820x547.jpg" alt="" class="wp-image-422404" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Chido-Munyati-Panel-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Chido-Munyati-Panel-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Chido-Munyati-Panel-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Chido-Munyati-Panel-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Chido-Munyati-Panel-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Chido-Munyati-Panel-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum</figcaption></figure>



By Chido Munyati, Head of Regional Agenda, Africa, World Economic Forum, and Landry Signé, Executive Director and Professor, Thunderbird School of Global Management in Washington, DC; Senior Fellow, The Brookings Institution; Co-Chair, World Economic Forum Regional Action Group for Africa.



At a time of multiple, overlapping global challenges – from climate change to energy shocks to rising inflation and a cost-of-living crisis – the Africa Continental Free Trade Area (AfCFTA) offers promise not only for the region but for the world.



The AfCFTA, established in 2018, will create the world’s largest free trade area, bringing transformative change and tremendous opportunity to African economies and business environments. Its adoption and implementation will accelerate intra-African trade and develop regional and local value chains, creating new business dynamics that offer investors access to a population of 1.7 billion people with combined business and consumer spending reaching $6.7 billion by <a href="https://www.brookings.edu/book/unlocking-africas-business-potential/">2030</a>.



Global businesses have an important role to play in accelerating the implementation of the AfCFTA, according to a new report from the World Economic Forum, in collaboration with the AfCFTA Secretariat and Forum partners. The report outlines high-potential sectors, initiatives to support business and investment, operational tools to facilitate the AfCFTA, and illustrative examples from successful businesses in Africa to guide businesses in successfully entering and expanding in this area. &nbsp;



The AfCFTA Secretariat selected four key sectors that represent high-potential opportunities for companies looking to invest in Africa: the automotive industry, agriculture and agro-processing, pharmaceuticals, and transportation and logistics. These four sectors are expected to see rapid acceleration in production and trade volumes under the AfCFTA, given that they have a high potential to meet local demand with local production. Until now, local demand for these goods and services is currently being met through relatively high-cost imports, despite the region’s growing and lower cost production capabilities.



While the AfCFTA offers business opportunities in each of these four sectors, companies will also need to understand how the changing environments under the trade agreement will affect their strategies for success in the region. The World Economic Forum is actively working toward implementing trade and investment tools that are aligned with the negotiation process of the AfCFTA by identifying areas where public-private collaboration can help reduce barriers and facilitate investment from international firms.



For example, public-private collaboration centered around implementing AfCFTA trade-facilitating provisions can <a href="https://www.tradefacilitation.org/">facilitate</a> trade in goods, on-the-ground initiatives can address fragmented investment regulatory frameworks, and bringing together groups committed to 4IR technology, digital payments, and information exchanges can support digital trade. To improve the societal outcomes of trade, the Forum’s Inclusive Trade Initiative is uncovering best practices that can be shared with AfCFTA negotiators and businesses. And an <a href="https://www.weforum.org/reports/accelerating-decarbonization-through-trade-in-climate-goods-and-services">inventory of 25 key climate technologies</a> and with country-specific studies helps identify opportunities for trade to align with circular economy goals. &nbsp;&nbsp;



Companies can also look to five new operational tools as they adjust to the changing dynamics under the trade agreement.



The AfCFTA Guided Trade Initiative has facilitated the start of trade in eight countries for 96 products, providing support and guidance on customs clearing and while gathering information on how to make the process more efficient for the private sector.



The Pan-African Payment and Settlement System enables users to make near-instant payments in their local currency without needing to convert to a foreign currency or use a third-party institution.



The AfCFTA Adjustment Facility Fund is a combination of a base fund, general fund, and credit fund, that assists governments and the private sector in addressing short-term disruptions through financing, technical assistance, and grants and compensation funding.



The AfCFTA Private Engagement Strategy helps companies to better understand the overall continental strategy as well as the specific initiatives and policy recommendations in emerging sectors that the AfCFTA is prioritizing.



And the Rules of Origin Manual &amp; E-Tariff Book sets the guidelines for the rules and procedures for determining the origin status of goods and makes information on duty rates easily searchable and comparable.



In addition, analysis of on-the-ground experience from companies including Agility, AFC, Coca-Cola, DP World, Menzies, Novartis, OCP, UBA, Volkswagen, and Yara, has revealed three main strategies that have led to success in Africa and can provide invaluable lessons to companies planning to seize the opportunities opened by the trade agreement.



The first strategy is to form local partnerships with governments, local institutions, universities and others to create regional hubs and host R&amp;D at local universities. The second strategy is to leverage key trade accelerators such as investing in local infrastructure and logistics, with opportunities ranging from food storage to partnering with local organizations to move various parts of the value chain onto the continent. The third strategy is to form integrated ecosystems by developing end-to-end value chains around local resources, which de-risks projects and creates an environment where shared infrastructure can support multiple projects in different sectors.



The global private sector must be prepared for the changes in trade dynamics ahead on the continent to seize the opportunities that the AfCFTA brings, achieving business success while helping to usher in a new era of economic development.



This article is part of the <a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2023">World Economic Forum’s Annual Meeting 2023</a>.

Centre for the Fourth Industrial Revolution, Rwanda Launch

A new era for global business and investment in Africa

Faced with rising demand for food by its growing population that is expected to cross the two-billion mark by 2050, amidst intensifying effects of climate change, Africa has no choice but to focus more on nature-friendly production.



This is the only sustainable way out for a continent that is already under intense pressure as it struggles to feed itself. According to the UN Food and Agriculture Organisation, Africa bears the heaviest malnutrition burden with an undernourishment prevalence rate of over 20%, compared to the global average of 9.9%.



With the food and nutrition insecurity projected to further worsen, production has to be significantly stepped up, urgently. Unfortunately, with the increasing frequency and intensity of extreme weather conditions due to biting effects of climate change, this boost in production can no longer be oblivious of its impact on the environment that also afflicts food systems. Food systems are estimated to contribute about a third of greenhouse gas emissions that cause climate change, with Africa particularly vulnerable. &nbsp;



Continuing with the traditional approaches, such as expanding cropland as a means of boosting production is no longer sustainable and risks serious consequences. Between 2003 and 2019, 75% of sub-Saharan Africa’s crop production growth came from the expansion of cropland, with only 25% coming from crop yield improvements. Such unsustainable patterns of production intensification have also compounded fragilities in Africa’s food systems.



On the other hand, the weighted average price of fertilizer has doubled between June 2021 and April 2022, putting a strain on farmers across the continent. The average application rate of mineral fertilizer in sub-Saharan Africa is 14 kilogrammes per hectare, which is at least 10 times lower than corresponding figures in South Asia, EU, South America, and East Asia. Limited availability and high prices of fertilizers has dampened prospects of the continent taking this route towards increasing productivity.



This leaves nature-positive production, and regenerative agriculture in particular, as a plausible option for the continent. It presents an opportunity to intensify production to address the current food crisis by sustainably boosting outputs to cater for growing consumption needs.



According to studies by the Africa Regenerative Agriculture Study Group, 2040 scenarios show that a 13% increase in yields from a regenerative agriculture scenario would translate into 62 million dry matter tonnes of additional crop production per year. This is in addition to potentially supporting 5 million full-time jobs by 2040, with over USD 70 billion of gross value being added per year.



Although many initiatives have been developed to promote nature-positive agriculture systems in Africa, smallholders have been slow to adopt the technological practices. Studies show that the certified land under organic agriculture in Africa is around 2.1 million hectares, which represents only 0.2% of the continent’s total agricultural area.



AGRA’s regenerative agriculture projects in Kakamega, Nandi and Vihiga counties of Kenya have seen about 4,451 hectares being put under sustainable land management practices, including conservation agriculture, agroforestry, soil and water conservation and integrated soil fertility management. However, despite the range of benefits from transitioning to regenerative and nature positive production bring clear, intrinsic barriers to the adoption of the practices by smallholder farmers still exist. This call for more efforts to bring more land under sustainable farming practices.



To effectively shift food systems to become more nature-positive, it depends largely on a conducive policy environment to deliver necessary incentives and de-risk the transition. This calls for a few key policy actions.



First, given that most regenerative practices involve permanent and long-term investments, it will be crucial to institute appropriate property rights and land tenure arrangements. This will not only provide the needed security to encourage investments, but also facilitate de-risking of the transition.



Secondly, we need to drive policy and regulatory reforms that level the playing field and incentivize regenerative agriculture. Current agricultural policies tend to disproportionately serve industrial agriculture over regenerative agriculture. Hence, we need to get the policy and institutional architecture right to support the needed transition.&nbsp;



The third imperative is focus on providing support for farmers during their beginning or transitioning years of regenerative farming. We need to invest more in decentralized and diverse food systems infrastructure, to create additional market and operational capacity for farmers pursuing regenerative farming. The technical resources offered through extension and public research institutions need to be improved to meet specific needs of farmers. National extension systems will also need to be appropriately resourced and equipped to provide tailored and specialist services to smallholder farmers to ease adoption hurdles.



Finally, we need to shape demand for food towards more sustainable diets. For instance, there should be mechanisms to support market development, raise consumer awareness and promote the consumption of products produced under regenerative farming systems.



This shift is necessary, since boosting productivity without a sustainability lens will continue to aggravate food systems challenges.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="661" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Vine-Mutyasira-1-820x661.jpg" alt="" class="wp-image-422387" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Vine-Mutyasira-1-820x661.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Vine-Mutyasira-1-300x242.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Vine-Mutyasira-1-112x90.jpg 112w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Vine-Mutyasira-1-768x619.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Vine-Mutyasira-1-1536x1239.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/Vine-Mutyasira-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Dr Vine Mutyasira is Program Officer for Policy Quantitative Modelling and Data Analytics at AGRA.</figcaption></figure>

Vine-Mutyasira-1

Africa needs more nature-friendly food systems

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-820x547.webp" alt="" class="wp-image-418642" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-820x547.webp 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-300x200.webp 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-135x90.webp 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-768x512.webp 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-1536x1024.webp 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE.webp 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Africa’s abundant renewable energy sources could make it a global hub for producing low-carbon hydrogen
Image: Unsplash/Anastasia Palagutina</figcaption></figure>



Geneva, Switzerland, 12 January 2023&nbsp;– The current energy crisis is driving inflation, slowing economic growth and creating social turmoil. We cannot afford to compound this crisis by allowing our responses to derail the energy transition. Yet short-term backward steps, such as increasing production of electricity from coal or broad-based consumption subsidies, risk doing just that. &nbsp; A comprehensive reappraisal of energy systems is urgently needed, to prioritize solutions that simultaneously enhance energy security while accelerating the transition towards a just, low-carbon future. A new report,&nbsp;<a href="https://www.weforum.org/whitepapers/securing-the-energy-transition">Securing the Energy Transition</a>,&nbsp;published today by the World Economic Forum, proposes a comprehensive framework that provides a strategic blueprint to make security and resilience the backbone of a transitioing energy system, and 10 actions to align current interventions to address the energy crisis with long term energy transition goals. &nbsp; “The energy crisis has brought energy security to the forefront of political and corporate agendas and prompted the need to develop responses that are adapted to how the energy system has evolved and to where it needs to transition,” said Roberto Bocca, Head of Shaping the Future of Energy, Materials and Infrastructure, World Economic Forum.&nbsp;“What is now a global crisis is a real opportunity to steer a more direct course towards a secure, sustainable and affordable energy future for everyone. This requires radical collaboration and a pragmatic approach to confront the complexities of the energy transition with immediate actions.” &nbsp; &nbsp; Energy systems in transition face opportunities and risks from changing energy markets as well as from increasingly decentralized, digitalized, decarbonized and distributed energy supplies – which necessitates a re-evaluation of energy security in the emerging context. The report proposes a comprehensive framework for a secure energy system to guide countries and policy-makers to plan strategic actions, policies and regulations.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="268" height="272" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/6722ec3b-6ec3-5f1e-f8fc-ea1a4740cfe4.png" alt="" class="wp-image-422334" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/6722ec3b-6ec3-5f1e-f8fc-ea1a4740cfe4.png 268w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/6722ec3b-6ec3-5f1e-f8fc-ea1a4740cfe4-89x90.png 89w" sizes="auto, (max-width: 268px) 100vw, 268px" /></figure>



The near-term consequences of the energy crisis require immediate interventions – but these responses offer a valuable opportunity to accelerate progress towards a future for energy that is both secure and sustainable. “The energy crisis impacts us all and the world cannot afford short-term fixes to the energy crisis which could increase future risks to both the climate and energy equity. The good news is that the crisis offers an opportunity for interventions that balance energy security with an effective low-carbon transition,” said Espen Mehlum, Head of Energy, Material and Infrastructure Program, World Economic Forum The report proposes 10 immediate actions organized under four key themes: Supply reinforcements



<ol class="wp-block-list">
<li>Prioritize supply from renewable energy and constrain fossil fuel reinforcements to committed emission reduction targets&nbsp;– the IEA recommends $5 of investment in renewables for every $1 spent on new fossil fuel production.</li>



<li>Advocate for a diversified energy and trade matrix&nbsp;– an over-concentration on a few energy suppliers was a key contributor to the current energy crisis.</li>



<li>Address methane leakage from hydrocarbon supply chains&nbsp;– the climate benefits of natural gas are no better than coal if more than 3.4% of it escapes before combustion, but some fields have fugitive emission rates of 6% or more.</li>
</ol>



Demand management



<ol class="wp-block-list">
<li>Maximize electrification and energy efficiency to alleviate and decarbonize demand&nbsp;– high gas prices in the near term will enhance the economics of investing in efficiencies and electrifying industries and home heating.</li>



<li>Nudge social behaviour towards responsible energy consumption&nbsp;– globally the top 10% of households consume roughly 20 times more energy than the bottom 10%, but targeted public information and incentives could encourage top-end consumers to become more efficient.</li>
</ol>



Fiscal measures and investments



<ol class="wp-block-list">
<li>Leverage excess profits from energy market to bridge clean energy investment gap&nbsp;– to reach net zero, investments in clean energy needs significant increase. Immediate deployment that can be achieved also through leveraging the extra profits – estimated in 4 trillions- that have been realised in some parts of the energy markets.</li>



<li>Target vulnerable consumers with fiscal measures, without interfering in market signals&nbsp;– government incentives and subsidies to improve energy affordability should avoid distorting market signals, be more targeted, and incentivise continued investment by private sector and efficient consumption.</li>



<li>Provide reliable signals to investors in energy supply and infrastructure&nbsp;– clear guidance is needed from policy-makers on the outlook for gas demand alongside acceleration of low-carbon sources.</li>
</ol>



Co-ordination and long-term strategy



<ol class="wp-block-list">
<li>Co-ordinate with regional peers to maximize efficiency and minimize costs –&nbsp;for example, joint procurement and co-ordinateed new LNG import facility installation &nbsp;to prevent overcapacity and stranded assets.</li>



<li>Revisit energy security strategies considering shifting technology and fuel landscape –&nbsp;this crisis provides an opportunity for countries to comprehensively redesign their approaches to energy security.</li>
</ol>



While governments are primarily responsible for ensuring their countries’ energy security, addressing this crisis in a sustainable manner will require exceptional levels of engagement from and collaboration between governments, companies, international organizations and individual consumers.

responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE

Energy Crisis Offers Opportunity to Embrace New Solutions that Advance a Secure, Sustainable, and Inclusive Energy Transition

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="616" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/a-plant-sprouting-from-a-handful-of-coins-investm-2022-12-01-21-16-04-utc-820x616.jpg" alt="" class="wp-image-422289" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/a-plant-sprouting-from-a-handful-of-coins-investm-2022-12-01-21-16-04-utc-820x616.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/a-plant-sprouting-from-a-handful-of-coins-investm-2022-12-01-21-16-04-utc-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/a-plant-sprouting-from-a-handful-of-coins-investm-2022-12-01-21-16-04-utc-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/a-plant-sprouting-from-a-handful-of-coins-investm-2022-12-01-21-16-04-utc-768x577.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/a-plant-sprouting-from-a-handful-of-coins-investm-2022-12-01-21-16-04-utc-1536x1153.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/a-plant-sprouting-from-a-handful-of-coins-investm-2022-12-01-21-16-04-utc-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A plant sprouting from a handful of coins. Investment, finance, and accounting concept</figcaption></figure>



As the provider of food, nutrition, and jobs for millions, Africa’s food systems are a central pillar of livelihoods and GDPs across the continent. Yet, they are at the forefront of the global climate crisis.



Climate change has reduced productivity growth of African food systems by 34 per cent since 1961. Still, continued warming to 2C this century could cause crop yields to fall by up to&nbsp;<a href="https://www.un.org/africarenewal/magazine/special-edition-agriculture-2014/despite-climate-change-africa-can-feed-africa" target="_blank" rel="noreferrer noopener">20 per cent</a>&nbsp;by 2030, endangering countless lives and livelihoods alike.



In the face of this urgent challenge, there remains a huge gap in Africa’s current climate adaptation funding, estimated to be within the region of&nbsp;<a href="https://gca.org/wp-content/uploads/2022/11/GCA_State-and-Trends-in-Adaptation-2022_Adaptation-Finance-Flows-in-Africa.pdf" target="_blank" rel="noreferrer noopener">US$41.3 billion</a>&nbsp;– annually – for the entire continent.



To bridge this climate finance gap, African countries must urgently adopt a range of innovative policy, financial, and institutional solutions to encourage more investment in adaptation. The recently released Malabo Montpellier Panel&nbsp;<a href="https://www.mamopanel.org/resources/climate-finance/" target="_blank" rel="noreferrer noopener">climate finance report</a>&nbsp;analyzes policy and institutional innovations and programmatic interventions across four African countries to explore government actions toward leveraging international climate finance for food systems transformation.



Key recommendations from the report underscore the importance of securing timely, predictable, and sustainable access to finance to support adaptation across Africa’s food systems – buffering the main source of nutrition and livelihoods for many. Similarly, access to finance must go hand-in-hand with capacity building in national institutions across the region, in the public and private sectors, for sustainable outcomes.



To begin with, mobilizing greater private sector finance will prove essential in bridging the existing gap in adaptation finance. Private finance is an underutilized resource in African climate finance, yet the goal of greater adaptation for food systems cannot be achieved without it.



Currently, the African Development Bank estimates that about 75 per cent of the financing required for the successful implementation of Africa’s Nationally Determined Contributions (NDCs) – the climate commitments and goals of each individual country – needs to be provided through private investments. Despite this, there is also a lack of data to accurately capture the amount of private climate finance that is currently allocated to food systems, a fundamental drawback that must be resolved in bridging this financing gap.



Recent developments in private finance offer a path forward for unlocking future adaptation funding for African countries. For instance, the&nbsp;<a href="https://www.clarmondial.com/fsf_launch_first_investment/" target="_blank" rel="noreferrer noopener">Food Securities Fund</a>, developed by Clarmondial, provides working capital loans to agricultural aggregators such as cooperatives, processors, and traders in developing and emerging markets.



Secondly, African countries should prioritize blended finance models in raising more and better adaptation funding.



Blended finance models combine concessional capital from private or public resources to de-risk and “leverage” additional capital from other actors. Furthermore, blended finance instruments allow each party to accomplish their own objectives while at the same time contributing to common goals – in this case – climate adaptation.



According to the National Climate Funds Tracker, there are 12 national climate funds in Africa. National climate funds offer an important means to mobilize funds for adaptation by raising and blending capital from public and private sources.



Moving forward, African governments and financial decisionmakers should seek to prioritize blended finance models to boost adaptation funding. Ethiopia’s Climate Resilient Green Economy (<a href="https://www.mofed.gov.et/programmes-projects/crge-facility/" target="_blank" rel="noreferrer noopener">CRGE</a>) Facility, for example, offers a dedicated financing arm to coordinate the receipts and disbursements of finance from international sources to sectoral ministries for implementation.



Finally, African countries should adopt local climate finance models, to boost the climate adaptation of local communities who are ultimately on the frontlines of climate change.



At present, estimates suggest that only five per cent of all funding flows from international climate funds have been disbursed for locally based climate adaptation interventions on the continent. Essentially, the communities that most need this finance are not receiving it.



In 2017/18, climate finance globally reached only&nbsp;<a href="https://www.climatepolicyinitiative.org/publication/climate-finance-small-scale-agriculture/" target="_blank" rel="noreferrer noopener">US$8.1 billion</a>&nbsp;for small-scale farmers, agri-entrepreneurs, and other value chain actors serving them – despite their importance in adapting our food systems as a whole to the impacts of climate change. These figures were equivalent to only&nbsp;<a href="https://www.climatepolicyinitiative.org/publication/climate-finance-small-scale-agriculture/" target="_blank" rel="noreferrer noopener">40 per cent</a>&nbsp;of the total climate funds committed to the agriculture, forestry, and land use sectors in those years.



Governments and financial sectors across Africa must take note of recent developments to grow the amount of climate finance reaching local communities. The development of the National Fund for Environment and Climate Change (FNEC) and Community Development Support Fund (FaDEC) in Benin, offer examples for how climate finance can help support the most vulnerable local communities more effectively.



To meet the adaptation needs of Africa’s food systems, an important paradigm shift amongst the finance community, and African governments, is needed; both groups are critical and need to complement each other to achieve collective aims.



Climate adaptation is not only an opportunity to address the impacts of climate change, but also serves as a springboard to unlock the potential of food systems to deliver for lives and livelihoods across Africa.



Dr. Debisi Araba, Visiting Researcher, Imperial College London; Member, Malabo Montpellier Panel

A plant sprouting from a handful of coins. Investment, finance, and accounting concept

The African innovations unlocking new pathways to scale access to climate finance

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1365582823-1-820x547.jpg" alt="" class="wp-image-422254" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1365582823-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1365582823-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1365582823-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1365582823-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1365582823-1-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/GettyImages-1365582823-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Two doctors in hospital hallway discussing electronic patient record &#8211; stock photo</figcaption></figure>



Geneva, Switzerland, 9 January 2023 – The shortage of healthcare workers could rise to 10 million by the end of the decade, affecting access to care, inequities and treatment of mental health. A new report published by the World Economic Forum, <a href="https://www.weforum.org/reports/global-health-and-healthcare-strategic-outlook-shaping-the-future-of-health-and-healthcare">Global Health and Healthcare Strategic Outlook</a>, offers business and policy-makers a blueprint for more sustainable, resilient healthcare systems rather than accepting trade-offs of efficiency over social fairness.



Launched in the run-up to the World Economic Forum Annual Meeting 2023 in Davos-Klosters, the report presents case studies in four areas that can drive change: equitable access and outcomes; healthcare systems transformation; technology and innovation; and environmental&nbsp;sustainability.



“The pandemic brought remarkable progress for development and delivery of medicines. We now need to focus on long-term system change to stop health services deteriorating in the face of economic crises. Businesses and policy-makers must think beyond false trade-offs of efficiency over social fairness and harness the power of public-private partnerships and outcomes-based regulation to drive healthy equity by the end of the decade,” said Shyam Bishen, Head of Health &amp; Healthcare, World Economic Forum.



The Annual Meeting will convene more than 2,700 leaders from business, government and civil society. Leaders from healthcare organizations will focus on driving public-private partnerships for better health outcomes.



The report, prepared with L.E.K. Consulting, highlights the pandemic’s disruptions such as a 25% drop in coverage of essential health services. This resulted in compound impacts on vulnerable populations and minority communities, especially in low- and middle-income countries. More specifically, COVID-19 put extra strain on healthcare systems, disrupted global supply chains of essential products and pushed overburdened care providers to breaking point.



“The threat of violence and burnout are real and is one of the contributors as to why doctors are considering other professions,” said Kashish Malhotra, Physician, Department of Internal Medicine, Dayanand Medical College and Hospital, North India



To improve access and narrow the global health disparity gap, the report urged healthcare leaders to allocate funds disproportionately towards alternative care models and to include more representative clinical trials across low- to middle-income countries.



As healthcare systems seek to adapt and evolve, innovations frequently outpace regulatory change. On top of this, public regulations vary by jurisdiction and the lack of common standards across the global industry erodes trust, inhibits reimbursements and slows the sector’s return to pre-pandemic stability. Meanwhile, the private sector is stymied by fragile and disrupted supply chains, while a go-it-alone business mindset further slows healthcare’s systemic transformation.



“Too often we see many companies trying to find the path through the forest themselves and each of them getting lost and not learning from one another,” saidJeff Allen, Chief Executive Officer, Friends of Cancer Research. “Public-private partnerships help bridge this divide to find solutions to common problems in a shorter time.” Service delivery value is worth more than volume, the report argues. To incorporate prevention, healthcare policy should be linked to consistent and measurable outcomes since what is efficient is not always what is most effective.



On partnerships for innovation, the pandemic accelerated a technological tipping point in digital health and telemedicine. This can be expanded to other areas of healthcare. With a Wi-Fi signal and better digital access, a rural patient can consult with a health worker from a nearby city or halfway around the world. “People want on-demand healthcare,” said Jisella Veath Dolan, Chief Global Advocacy Officer, Honor + Home Instead. “We want greater accessibility to real-time answers.”



Remote care empowers both patient and worker. It improves convenience, adherence and access to information across geographies. By reducing the need for traditional infrastructure, costs per patient fall. And telehealth goes beyond online consultation. Artificial intelligence (AI) and robotics further support clinical decisions, home diagnostics, home-administered drug delivery systems and patient monitoring devices. By harmonizing data use, Dolan said, “physicians are building better relationships with patients through telehealth and we are seeing greater uptick in usage by older adults.” The pandemic demanded emergency responses. However, according to the new report, medical triumphs are too often reactive “cures” to the communicative zoonotic diseases that could have been prevented at far lower costs. To preserve health and save lives, a higher return on investment comes from clean air, safe water and healthy biodiversity. &nbsp;

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‘Patient-First’ Tech Innovations Can Boost Healthcare Access, Tackle Workforce Shortages and Burnout 

Cabinet has approved the publication of the Green Hydrogen Commercialisation Strategy (GHCS) for public comment.



The strategy is aimed at ensuring that the country takes full advantage of the opportunities provided by green industrialisation.



Minister in the Presidency, Mondli Gungubele, said that the Green Hydrogen Commercialisation Strategy will ensure that South Africa becomes a major producer and exporter of green hydrogen.



“It contributes towards economic growth and supports the country’s just transition interventions towards the reduction of carbon emissions,” Gungubele said at a post-Cabinet media briefing on Thursday.



South Africa already has the Hydrogen Strategy and the Hydrogen Society Roadmap adopted by Cabinet in 2021.



Cabinet said that the rapidly growing green hydrogen market presents huge opportunities for the country.



The release of the GHCS for public comment follows the recent South Africa Green Hydrogen Summit which outlined some of the country’s future plans.



South Africa is one of the founding members of the Africa Green Hydrogen Alliance (AGHA) which seeks to promote continental green hydrogen cooperation. –SAnews.gov.za

hydrogen

Cabinet approves publication of Green Hydrogen Commercialisation Strategy

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="499" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/12/SSAK-QAK-main-lab-Matthew-Henning-4MG-2-820x499.jpg" alt="" class="wp-image-421744" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/12/SSAK-QAK-main-lab-Matthew-Henning-4MG-2-820x499.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/SSAK-QAK-main-lab-Matthew-Henning-4MG-2-300x182.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/SSAK-QAK-main-lab-Matthew-Henning-4MG-2-148x90.jpg 148w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/SSAK-QAK-main-lab-Matthew-Henning-4MG-2-768x467.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/SSAK-QAK-main-lab-Matthew-Henning-4MG-2-1536x934.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/SSAK-QAK-main-lab-Matthew-Henning-4MG-2.jpg 1638w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Professor Quarraisha Abdool Karim (L) and Prof Salim Abdool Karim (R) at the CAPRISA main laboratory in Durban, South Africa. They are two of the world’s leading AIDS researchers, with pioneering contributions in understanding the evolving HIV epidemic among young people, especially among young women while also advocating for the rights of people living with and affected by HIV.</figcaption></figure>



We can no longer ignore the connection between inequality and new HIV infections &#8211; Prof. Salim Abdool Karim, Director of the Center for the AIDS Program of Research in South Africa (CAPRISA)



In sub-Saharan Africa, every two minutes an adolescent girl or young woman was newly infected with HIV in 2021 alone. One young woman. Every two minutes. Think about that for a moment. The <a href="https://indanger.unaids.org/">In Danger</a>report should raise alarm bells for all of us.



The COVID-19 pandemic has slowed down HIV prevention and treatment in the past two-and-a-half years leading to significant impact on the control of the disease and the achievement of the <a href="https://www.unaids.org/en/resources/documents/2020/global-aids-report">95-95-9</a>5 strategy which calls for 95% of people living with HIV to know their HIV status, 95% of people who know their status to be on antiretroviral, and 95% of all patients receiving antiretroviral therapy to be virally suppressed.



While much progress has been made over the past four decades since the first HIV cases were reported, not everyone is benefitting equally from the scientific advancements that have taken place in HIV research in recent years. Notably, this progress should not be used to justify inequalities that still persist in HIV testing and treatment, even more so for the introduction of new technologies. The upcoming 2nd <a href="https://cphia2022.com/">International Conference on Public Health in Africa</a> (CPHIA 2022) December 13-15 in Kigali, Rwanda will shine the spotlight on this connection and the urgent need to focus on HIV response alongside Tuberculosis (TB), malaria and other neglected tropical diseases (NTDs).



Reducing stigma and discrimination, and increasing access to justice are critical in the global response to HIV. By combining resources and strengths to support vulnerable communities at a higher risk of exposure to HIV – such as migrants and prisoners, people who use drugs, LGBTI people, sex workers, teenagers, young people, women and children, we can work together to address the range of challenges they face and in so doing, ensure they have timely access to essential HIV care and support.



Identifying and involving these vulnerable communities lie at the heart of an effective action plan. These groups bring invaluable knowledge of the specific obstacles they face, and the potential – and sustainable – solutions to affect real long-term change. Partnerships between community-based organisations and academic institutions can provide the evidence to inform policy, programs and services to better respond to the unique realities and needs of communities, particularly the most marginalised. Such partnerships are fundamental to creating lasting health change in Africa.



From the COVID-19 response, we have learned the importance of supporting scientific innovation and promoting cutting-edge medical technologies, and making them available to people in all countries throughout the world in an affordable and timely manner. Similarly, African-led convenings, such as CPHIA 2022, will offer opportunities for researchers and public health leaders share knowledge, and strengthen scientific collaboration and innovation to reinforce stronger primary health care systems and create a conducive environment capable of responding to diseases—such as HIV —that continue to disproportionately affect vulnerable communities.



The <a href="https://www.unaids.org/en/resources/documents/2021/2021_political-declaration-on-hiv-and-aids">political declaration</a> adopted by United Nations Member States in 2021 to end inequality and get on track to end AIDS by 2030 is a clear indication that there is genuine eagerness – and action – toward reducing new HIV infection. Reaching this goal will require an integrated and holistic approach by all players to create mutually beneficial partnerships; those that seek to combine the different strengths of diverse partners to convert big ideas into bigger, impactful outcomes.



Therefore, it is important to learn from the pandemic and leverage cross-border and cross-sectoral collaborations with speed and accuracy when these challenges threaten our lives and economic well-being. &nbsp;



We owe it to the next generation to do better. We owe it to them to break the cycle of economic, social, cultural and legal inequalities and ensure an <a href="https://2009-2017.state.gov/secretary/20092013clinton/rm/2011/11/176810.htm">AIDS-free generation</a> with zero new HIV infections, zero discrimination and zero AIDS-related deaths. The goal is ambitious but achievable and vital in ending AIDS as a global health threat.



As we commemorate the 34th anniversary of World AIDS Day today (1 December) under the theme “Equalize”, I join hands with other public health leaders in every sphere and at every level in committing providing actionable solutions to the barriers that keep us from making progress and helping to end AIDS.

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Ending AIDS for the Next Generation

Africa is in a race against time on food security and the stakes could not be higher. The situation is unprecedented in my four decades of experience working in agricultural research and development.



We are faced with the longest drought in over 40 years, leaving <a href="https://www.who.int/news/item/02-08-2022-who-launches-appeal-to-respond-to-urgent-health-needs-in-the-greater-horn-of-africa">80 million people in the Horn of Africa with uncertain access to adequate nourishment</a>. In my home country of Nigeria, <a href="https://nema.gov.ng/">recent flooding</a> – the worst in a decade – has destroyed vital food supplies in Africa’s most populous nation. Hunger is again stalking the continent.



Africa’s food security is squeezed from two sides since the continent has both the lowest agricultural productivity of any region and the fastest population growth. Yields of everything from wheat to rice to cassava are well below the global average, reflecting the fact that millions of smallholder farmers lack access to the basic tools and skills that could lift them beyond subsistence.



The short-term outlook is bleak. Regional conflicts, extreme weather events and economic instability are all exacerbating the food crisis. And Russia’s invasion of Ukraine has driven up global prices for food, fuel and fertilizer, limiting the ability of African countries to finance vital imports.



Despite this, there remains an enormous untapped opportunity to put Africa’s food security on a sounder footing. The economic case for action is compelling. Investments in agricultural innovations have been shown to generate <a href="https://www.cgiar.org/news-events/news/cgiar-research-pays-off-new-report-finds-10-times-return-on-investment/">returns 10 times the amount initially invested</a>.



By rolling out agricultural solutions that are known to improve productivity – from better seeds and fertilizers to early warning systems and training for growers – farms across Africa can increase output and build long-term resilience.



According to one analysis, <a href="https://www.mckinsey.com/industries/agriculture/our-insights/winning-in-africas-agricultural-market">Africa could produce two to three times more cereals and coarse grains</a>, primarily by improving crop yields and reducing post-harvest losses. Even a fraction of that improvement would transform the continent’s food security situation and slash its current alarming dependence on imports.



The window for action, however, is limited and the need to implement change is urgent. African nations need to move away from dependency on development assistance, they need to significantly invest in agricultural research and development and for the near term, they need to select and fast-track interventions with the greatest potential to deliver both immediate gains and sustainable improvements in agriculture. This is essential to meet the demographic challenges of the years ahead.



Encouragingly, leading African institutions are now coming together to help make these productivity gains a reality. &nbsp;



The African Development Bank (AfDB), the African Union, the Forum for Agricultural Research in Africa and CGIAR – the world’s largest agricultural research and innovation network, have recently <a href="https://www.cgiar.org/news-events/news/abidjan-ii-african-development-bank-african-union-commission-cgiar-forum-for-agricultural-research-in-africa-join-forces-to-strengthen-africas-food-systems/">committed to close cooperation</a> to take African agriculture to the next level. This is welcome news.



The aim – to empower African farmers to better feed their communities – is simple, yet the prize is great. The immediate priority is to deploy proven tools at the scale of tens of millions of farmers. It is a goal that is eminently achievable. In the last three years, for example, the Technologies for African Agricultural Transformation (TAAT) scheme, which is supported by the African Development Bank and implemented by CGIAR, has delivered climate-smart seeds to 12 million farmers in 27 countries. Breeding better crop varieties is just one of a range of transformational innovations that are needed to ensure Africa’s future food security, ranging from improvements in soil fertility to better livestock management. It does not stop there, for any holistic solution it will be critical to maintain investment in research, to improve resilience to future shocks.



Leveraging the capabilities of CGIAR’s network of research centers, which benefit from the support and partnership of their host countries in Africa and beyond, Africa can achieve similar agricultural growth and food security gains seen in Asia and Latin America.



The transition to a more unified and integrated “One CGIAR” is positioning the organization to tackle increasingly complex and interconnected challenges to food security and deliver holistic solutions to smallholder farmers everywhere. I believe that smallholder farmers in Africa will benefit most from an integrated CGIAR working in partnership with African research and innovation institutions. That is why I, along with other African stakeholders and partners of CGIAR, support the call from its <a href="https://www.cgiar.org/news-events/news/cgiar-country-region-and-funding-partners-signal-strong-support-for-integration/">country, regional and funding constituents</a>, for CGIAR Centers and other parties to endorse in December an agreement that puts the integration on a clear path forward.  



Sadly, the world is not on track to meet the <a href="https://www.un.org/sustainabledevelopment/hunger/">UN Sustainable Development Goal of zero hunger by 2030</a> – and it is people in Africa who will bear the brunt of this policy failure. That is all the more reason to deploy proven technologies that can transform the fortunes of Africa’s farmers today, while maintaining critical investment in research that will provide resilience to future shocks. &nbsp;&nbsp;



Now is the right time for African decision-makers to make the smart investment decisions needed to get appropriate technologies to their farmers at scale.



Dr Nwanze has worked for more than 40 years for CGIAR and Rome-based agencies, most recently serving as President of the International Fund for Agricultural Development (IFAD), and is a former member of the CGIAR System Management Board.

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Unleashing Africa’s agricultural potential is key to food security

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/responsive_big_webp_-T-8c6OQK1-KTppFdqwFVMOi_mvKHnJgNOWMtDDuCRA-820x547.webp" alt="" class="wp-image-421605" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/responsive_big_webp_-T-8c6OQK1-KTppFdqwFVMOi_mvKHnJgNOWMtDDuCRA-820x547.webp 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/responsive_big_webp_-T-8c6OQK1-KTppFdqwFVMOi_mvKHnJgNOWMtDDuCRA-300x200.webp 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/responsive_big_webp_-T-8c6OQK1-KTppFdqwFVMOi_mvKHnJgNOWMtDDuCRA-135x90.webp 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/responsive_big_webp_-T-8c6OQK1-KTppFdqwFVMOi_mvKHnJgNOWMtDDuCRA-768x512.webp 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/responsive_big_webp_-T-8c6OQK1-KTppFdqwFVMOi_mvKHnJgNOWMtDDuCRA-1536x1024.webp 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/responsive_big_webp_-T-8c6OQK1-KTppFdqwFVMOi_mvKHnJgNOWMtDDuCRA.webp 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Jute farmers work in a flooded area of rural West Bengal which has been badly hit by climate change. Image: DIPAYAN BOSE / Climate Visuals Countdown.</figcaption></figure>



As the impacts of climate change hit harder, a new realism is dawning about our changed circumstances. Increasingly, we are recognising that climate change isn’t just a future problem from which we must protect our children. It is a problem from which we must protect ourselves today.



We need to fight climate change with both sword (cutting our emissions to fight further increases in warming) and shield (protecting ourselves from climate change’s increasing effects). Adaptation and mitigation should be pursued, as UN Secretary General António Guterres said, &#8220;with equal force and urgency.&#8221; Over 1C of warming has already happened, and <a href="https://www.unep.org/resources/emissions-gap-report-2022">warming over 1.5C is very likely</a>. We are <a href="https://www.unep.org/resources/adaptation-gap-report-2021">nowhere near ready</a> for the impacts this will bring.



<h2 class="wp-block-heading">Climate adaptation action plan</h2>



On 8 November 2022, the COP27 Presidency launched the&nbsp;<a href="https://climatechampions.unfccc.int/wp-content/uploads/2022/11/SeS-Adaptation-Agenda_Complete-Report-COP27_FINAL-1.pdf">Sharm-El-Sheikh Adaptation Agenda</a>&nbsp;– the first ever comprehensive global action plan rallying governments and non-state actors behind 30 adaptation goals for a resilient world by 2030. This framework signals a growing expectation that business, alongside other actors (countries, cities, investors, civil society), take action to adapt to the acute hazards now facing us.



Adaptation is a crucial part of the fight against climate change. It is necessary to protect people around the world from the climate change that’s already in process, and it also brings huge opportunities to help 7.8 billion people transition to a more sustainable and secure way of life.



For example, transitioning to&nbsp;<a href="https://www.ipcc.ch/report/ar6/wg2/">climate-resilient farming practices</a>&nbsp;could increase yields by 17% without increasing land use. Adaptation will spur the expansion of industries, such as water conservation, heat-resistant infrastructure, and drought-resistant agricultures, supporting prosperity and security for billions of people as we build a climate-resilient world.



Adaptation is good for business. It can help companies expand their business footprint, achieve efficiency gains, innovate for the future, and enhance long-term sustainability. In addition, business adaptation is good for the society of which business is an inseparable part. Business thrives when society thrives.



Retooling society to cope with a warming climate is a huge task. Business, with its dynamic capacity to power innovation and change, has a critical role to play. That’s why PwC and the World Economic Forum are collaborating to help drive adaptation to climate change. We’ve united a global community from the private and public sectors to&nbsp;<a href="https://www.pwc.com/gx/en/services/sustainability/publications/critical-business-actions-for-climate-change-adaptation.html">define three areas</a>&nbsp;in which business can take action:



<h2 class="wp-block-heading">1. Enhance resilience</h2>



Companies should assess their climate risks and build sufficient resilience. Companies should study the risks in their supply chains, identifying risk hotspots, prioritising areas for adaptation, and supporting stakeholders in their supply chains with the technical skills and financial support they need to adapt. For example, a large retailer identified dozens of its facilities at risk of extreme weather, while a major conglomerate identified hundreds of millions of dollars of potential climate-related risks in its supply chain – enabling both companies to <a href="https://www.pwc.com/gx/en/services/sustainability/publications/risks-and-opportunities-of-climate-change-on-business.html">take action to build resilience</a>. Other firms are striving to build resilience through developing or using, for example, weather data and early warning systems, drought resistant crops, flood defences, waste water collection and re-use, cooling systems, heat resistant infrastructure, and more.



<h2 class="wp-block-heading">2. Capitalise on opportunities</h2>



Businesses can flex their skills in investment and innovation to develop and scale products and services that enable society to live sustainably in the new climate reality. This includes, for example, investing in R&amp;D and building ecosystems to foster innovation and scale new adaptation solutions.



<h2 class="wp-block-heading">3. Shape collaborative outcomes</h2>



Successful adaptation requires cross-society collaboration. Managing climate change requires&nbsp;<a href="https://www.pwc.com/gx/en/services/sustainability/publications/net-zero-progress-and-perils.html">partnership between all parts of society</a>. Businesses can participate in multi-stakeholder efforts that promote action on climate change adaptation, from engaging with governments on policy-making to collaborating with industry players, community leaders, academia, development agencies and others to promote action. Partnering with local communities is particularly valuable because climate change has different impacts in different locales, meaning adaptation solutions need to be hyper-local. In addition, companies can join adaptation initiatives like&nbsp;<a href="https://racetozero.unfccc.int/join-the-race-to-resilience/">Race to Resilience</a>, co-invest in adaptation projects, and provide technical support to adaptation efforts.



<h2 class="wp-block-heading">Investing in climate adaptation</h2>



In short, smart companies are acting now to adapt to a climate that is changing before our eyes. The more energetically business dedicates itself to adaptation, the more society as a whole is helped to adapt and benefit.



Some business leaders view adaptation as a corporate social responsibility initiative rather than a business imperative as part of the overall execution strategy and risk management. We encourage these executives to recognise that&nbsp;<a href="https://www.pwc.com/gx/en/services/sustainability/publications/risks-and-opportunities-of-climate-change-on-business.html">all companies</a>&nbsp;can be affected by climate change. Even business leaders who may believe their companies have little exposure to climate change have&nbsp;<a href="https://www.pwc.com/gx/en/services/sustainability/climate/the-true-test-of-climate-resilience.html">no reason for complacency</a>.



The effort of adaptation is worth it. Globally, $1.8 trillion of investment into adaptation efforts could generate&nbsp;<a href="https://gca.org/reports/adapt-now-a-global-call-for-leadership-on-climate-resilience/">$7.1 trillion in total net benefits by 2030</a>. Insurers reckon that a dollar spent on adaptation – strengthening flood and wind defences, for example –&nbsp;<a href="https://www.economist.com/special-report/2015/11/26/hot-and-bothered">saves five in reconstruction</a>. Best of all, of course, proactive adaptation opens up opportunities to build a more sustainable world.



We encourage all companies to&nbsp;<a href="https://www.pwc.com/gx/en/services/sustainability/publications/critical-business-actions-for-climate-change-adaptation.html">take action in these three areas</a>&nbsp;to help fight climate change with both sword and shield.

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3 ways business can take action in the fight against climate change

Although African delegates had marginal success in placing the continent’s unique needs and circumstances on the agenda of COP27, the ultimate deal to create a ‘loss and damage’ fund is a huge boost to tackle climate change.



The proposed dedicated fund will provide a framework for developed countries to compensate developing countries that have suffered the impact of climate-related damage to infrastructure. It promises to benefit Africa, a continent, disproportionately afflicted by the effects of climate change. Even as delegates from across the world, drawn from government, private sector, not-for-profits, young people, civil society, indigenous peoples, and local communities congregated to discuss the solutions, there was the backdrop of severe droughts and floods in different parts of the continent, defining the urgency.



The challenge for Africa now lies in sustaining the momentum to address ‘loss and damage’ by setting in motion the proposed fund. We need to lock in the details that will operationalise the fund, for it to begin paying out compensation to unlock its benefits, for inclusive and sustainable development that leaves no one behind. There is a great onus on the international community to turn the agreement into action in the spirit of ‘follow through’ that COP27 was about. Additionally, consideration needs to be given to widening the net of contributors to the fund beyond the developed countries to draw in the private sector, including through innovative mechanisms, such as sustainable smart finance.



Besides the opportunity presented by the ‘loss and damage’ fund, there were other glimmers of hope in advancing climate change action at COP27. These too need to be consolidated and pursued.



One such opportunity is food systems, featuring prominently in COP27 for the first time in such gatherings. We cannot win the fight against climate change unless attention is paid to holistically transforming food systems. Having it on the negotiation floor is a crucial first step in this direction. This focus needs to be sustained and explore scaling resilient systems while tackling emissions across the value chains.



In addition to this, indigenous voices were significantly represented at COP27. This needs to be built on and strengthened, knowing communities are good custodians of nature. Nature is our climate defender and we need communities to unleash this potential if we are to effectively tackle the climate crisis. We have to link the mega commitments to action at the grassroots by investing in nature-based solutions.



All these are opportunities to re-energize the fight against climate change. Africa cannot afford to relent and take its foot off the pedal. Efforts need to be sustained to scale up urgent climate action. More importantly, the continent has to continue working together to fight climate change and biodiversity loss. Now more than ever before, collective response to the climate crisis is key, to unlock investments in technology transfer, capacity building, and financial resources. We all have to work together for a better future by pursuing the opportunities unlocked by COP27.



As we tackle the climate change crisis, nature-based solutions must remain a core part of our ammunition. Natural habitats have the ability to absorb and store vast amounts of carbon. It is projected that protection, restoration, and better management of our lands and wetlands reduce up to a third of the emissions needed to limit global warming and keep the climate within safe boundaries. Natural solutions not only restore and protect vulnerable ecosystems but also positively impact the livelihoods of communities. Nature-based solutions require more climate funding, beyond the current less than 10% percent globally. In this regard, The Nature Conservancy will continue providing the expertise and the science for governments and other actors.



As Africa looks ahead to COP28 next year, delegates must prepare well to secure a more ambitious mitigation outcome. The continent needs to secure a robust global goal on adaptation and the scaling of funding to move faster and further, beyond pledges and commitments towards effective climate action.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="697" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/Ademola-Ajagbe-2-820x697.jpg" alt="" class="wp-image-421601" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/Ademola-Ajagbe-2-820x697.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/Ademola-Ajagbe-2-300x255.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/Ademola-Ajagbe-2-106x90.jpg 106w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/Ademola-Ajagbe-2-768x653.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/Ademola-Ajagbe-2-1536x1305.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/Ademola-Ajagbe-2-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Ademola Ajagbe is the Regional Managing Director, Africa at The Nature Conservancy</figcaption></figure>



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How Africa can build on COP27’s small wins

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/51585576608_b441fdc2ab_o-1-820x547.jpg" alt="" class="wp-image-421577" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/51585576608_b441fdc2ab_o-1-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/51585576608_b441fdc2ab_o-1-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/51585576608_b441fdc2ab_o-1-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/51585576608_b441fdc2ab_o-1-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/51585576608_b441fdc2ab_o-1-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/51585576608_b441fdc2ab_o-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>FoodBanking Kenya volunteers distribute food items such as flour, potatoes, kales and french beans to the residents of Ilbisi located in Kajiado County, Kenya, on September 20, 2021. PHOTO © THE GLOBAL FOODBANKING NETWORK/BRIAN OTIENO</figcaption></figure>



The&nbsp;Maasai&nbsp;people of Kenya’s Great Rift Valley are some of Africa’s most well-known and culturally distinctive tribal peoples. Traditionally nomadic and pastoralist, the&nbsp;Maasai&nbsp;are self-sufficient, thriving from the production of their livestock and living off the lands they call home.



Yet, when this land fails, due to climate stress and&nbsp;<a href="https://www.reuters.com/world/africa/drought-forces-kenyas-maasai-sell-starving-cattle-pittance-2022-10-19/" target="_blank" rel="noreferrer noopener">persistent drought</a>&nbsp;rendering swathes of pastureland unviable for the grazing of livestock, the specter of hunger and deprivation follows close behind. However, for many of the&nbsp;Maasai, relief has come from what some might consider an unexpected source: food banks.



Traversing inaccessible terrain and the interference of wild elephants, the refrigerated trucks of&nbsp;<a href="https://www.foodbankingkenya.org/" target="_blank" rel="noreferrer noopener">Food Banking Kenya</a>&nbsp;are able to overcome numerous obstacles with the support of local government guides. And by working with local churches and other institutions, the food bank can distribute much-needed food to the peripatetic&nbsp;Maasai, before they move on to pastures anew.



From maize and rice to fresh fruits and vegetables, the food provided offers immediate relief from the rising insecurities facing communities like the&nbsp;Maasai. Yet, much of the food that eventually reaches this community was not originally grown for this purpose.



Instead, it is largely sourced from many of Kenya’s farms, which experience around 40 per cent of their production ending up wasted, largely post-harvest. Juxtapose this against the reality that a similar percentage of Kenyans face food insecurity every day, and it becomes more apparent that food banks can play an important role in addressing both issues through food redistribution.



Africa’s food banks can bridge the gap between farms with surplus food and communities without. But, although Food Banking Kenya’s&nbsp;<a href="https://www.foodbankingkenya.org/?page_id=21" target="_blank" rel="noreferrer noopener">Agricultural Recovery Programme</a>&nbsp;prevented over 400,000 kilograms of fresh fruits and vegetables going to waste on the country’s farms in 2021, more effective support is needed to truly make a dent in Africa’s mountain of food waste.



This is because the dual climate and hunger challenges facing the&nbsp;Maasai&nbsp;are not unique to their community alone, but are symptomatic of the rising burden being placed on Africa’s already strained food systems.



The continent, like many parts of the world, suffers not from a lack of food – but a lack of connectivity between the food it produces, and its most vulnerable communities.



Organizations which can bridge this gap, like food banks, are not yet fully understood or appreciated by governments, leaving much unfulfilled potential. Meanwhile, reducing food waste also helps minimize the agricultural sector’s carbon footprint, as it alone is responsible for up to&nbsp;<a href="https://www.fao.org/3/bb144e/bb144e.pdf" target="_blank" rel="noreferrer noopener">8 per cent</a>&nbsp;of global greenhouse gas emissions.



With greater support, Africa’s emerging food bank sector can help address rising continental food insecurity, which is exacerbated by climate change and global economic shocks.



That’s why following COP27 – recognized as ‘Africa’s COP’ – both African and global leaders must begin to fully recognize and support the role of food banks in addressing the intertwined climate and hunger crisis.



To begin with, this means adopting policies that better support food donation and distribution and the role food banks play in delivering greater nutritional security, climate change mitigation, and adaptation, across the continent. Many food producers, in Kenya and across Africa, produce a surplus of food but face barriers when preventing this from going to waste if it is not possible to sell to markets.



Better policies, as highlighted by the&nbsp;<a href="https://atlas.foodbanking.org/" target="_blank" rel="noreferrer noopener">Global Food Donation Policy Atlas</a>, such as tax incentives and liability protection for food donors, must be adopted to prevent food waste and feed communities, alongside building awareness for food banks’ role in reducing food waste across the entire food value chain.



Secondly, with the rising impact of climate change on our food systems in mind, African governments must recognize the importance of strategically including food banks in their national climate action plans, known as Nationally Determined Contributions (NDCs).



Finally, the continent’s leaders must understand and support a broader role for food banks in the functioning of Africa’s food systems. For instance, because of Food Banking Kenya’s&nbsp;<a href="https://www.foodbankingkenya.org/?page_id=21" target="_blank" rel="noreferrer noopener">school feeding program</a>, more than 7,000 Kenyan children are not only receiving nutritious diets, but are also supported to stay in school and receive an invaluable education.



Far from being just a port of last resort, food banks now stand ready to serve Africa at the nexus of two of the continent’s greatest challenges – the increasing impact of climate change and rising levels of hunger.

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Food banks in Africa: a novel solution to the continent’s hunger and climate crises

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="551" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1301210664-820x551.jpeg" alt="" class="wp-image-397334" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1301210664-820x551.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1301210664-300x202.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1301210664-768x516.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1301210664-1536x1032.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/02/GettyImages-1301210664-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>PARIS, FRANCE &#8211; FEBRUARY 09: In this photo illustration, a visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course&#8217;s graph on February 09, 2021 in Paris, France. The value of Bitcoin (BTC) has exceeded the threshold of 48,000 dollars for the first time in history. Electric vehicle maker Tesla has invested $ 1.5 billion in the virtual currency and will begin accepting it as payment for the purchase of its cars, the group said. The move comes days after Elon Musk temporarily changed his Twitter mini-description to simply #bitcoin. (Photo illustration by Chesnot/Getty Images)</figcaption></figure>



The collapse of the world’s third largest crypto exchange&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?data=05%7C01%7CSALAVI%40imf.org%7Ce4707283914e4532e91108dac9b31d19%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C638044068398880592%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;reserved=0&amp;sdata=d9aldIV1zhwvNhuKQaePamyZGWufDy3hNlFshw%2BNTIU%3D&amp;url=https%3A%2F%2Fwww.wsj.com%2Farticles%2Fftx-tapped-into-customer-accounts-to-fund-risky-bets-setting-up-its-downfall-11668093732%3Futm_medium%3Demail%26utm_source%3Dgovdelivery&amp;utm_medium=email&amp;utm_source=govdelivery">FTX</a>, and subsequent plunge in the prices of Bitcoin, Ethereum, and other major crypto assets, is prompting renewed calls for greater consumer protection and&nbsp;<a href="https://www.imf.org/en/Publications/fandd/issues/2022/09/Regulating-crypto-Narain-Moretti?utm_medium=email&amp;utm_source=govdelivery">regulation</a>&nbsp;of the crypto industry.



Regulating a highly volatile and decentralized system remains a challenge for most governments, requiring a balance between minimizing risk and maximizing innovation. Only one-quarter of countries in <a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2022/10/14/regional-economic-outlook-for-sub-saharan-africa-october-2022?utm_medium=email&amp;utm_source=govdelivery#Digital-Currency-Innovations-in-Sub-Saharan-Africa">sub-Saharan Africa</a> formally regulate crypto. However, as our <a href="https://www.imf.org/en/Blogs/chart-of-the-week?utm_medium=email&amp;utm_source=govdelivery">Chart of the Week</a> shows, two-thirds have implemented some restrictions and six countries—Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of Congo—have banned crypto. Zimbabwe has ordered all banks to stop processing transactions and Liberia directed a local crypto startup to cease operations (implicit bans).



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="538" height="538" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/crypto-map-africa-for-translation_crop.jpg" alt="" class="wp-image-421543" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/crypto-map-africa-for-translation_crop.jpg 538w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/crypto-map-africa-for-translation_crop-300x300.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/crypto-map-africa-for-translation_crop-90x90.jpg 90w" sizes="auto, (max-width: 538px) 100vw, 538px" /></figure>



<h2 class="wp-block-heading" id="h-view-the-interactive-version-here"><a href="https://www.imf.org/en/Blogs/Articles/2022/11/22/africas-growing-crypto-market-needs-better-regulations?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">View the interactive version here.</a></h2>



Africa is one of the fastest-growing crypto markets in the world, according to Chainalysis, but remains the smallest, with crypto transactions peaking at $20 billion per month in mid-2021. Kenya, Nigeria, and South Africa have the highest number of users in the region. Many people use crypto assets for commercial payments, but their volatility makes them unsuitable as a store of value.



Policymakers are also worried that cryptocurrencies can be used to transfer funds illegally out of the region and to circumvent local rules to prevent capital outflows. Widespread use of crypto could also undermine the effectiveness of monetary policy, creating risks for financial and macroeconomic stability.



The risks are that much greater if crypto is adopted as legal tender—as the Central African Republic recently did. If crypto assets are held or accepted by the government as means of payment, it could put public finances at risk.



The Central African Republic is the first country in Africa, and the second in the world after&nbsp;<a href="https://www.imf.org/en/News/Articles/2022/02/15/cf-el-salvadors-comeback-constrained-by-increased-risks?utm_medium=email&amp;utm_source=govdelivery">El Salvador</a>&nbsp;to designate Bitcoin as a legal tender. The measure has put the country at odds with the Bank of Central African States (BEAC)—the regional central bank that serves the Economic and Monetary Community of Central Africa (CEMAC), which the Central African Republic is a member of—and violates the CEMAC Treaty. BEAC’s banking sector supervisory body—Central Africa&#8217;s Banking Commission—has banned the use of crypto for financial transactions in the CEMAC region.



—This blog is based on the October 2022&nbsp;<a href="https://www.imf.org/en/Publications/REO/SSA/Issues/2022/10/14/regional-economic-outlook-for-sub-saharan-africa-october-2022?utm_medium=email&amp;utm_source=govdelivery">Regional Economic Outlook&nbsp;</a>for sub-Saharan Africa

Novelty Coins Representing The Bitcoin Cryptocurrency : Illustration

Africa’s Growing Crypto Market Needs Better Regulations

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="555" height="550" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/thumbnail_Bogolo-Kenwendo.jpg" alt="" class="wp-image-421409" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/thumbnail_Bogolo-Kenwendo.jpg 555w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/thumbnail_Bogolo-Kenwendo-300x297.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/thumbnail_Bogolo-Kenwendo-91x90.jpg 91w" sizes="auto, (max-width: 555px) 100vw, 555px" /><figcaption>Bogolo&nbsp;Joy&nbsp;Kenewendo is&nbsp;UN Climate Change High-Level Champions’ Special Advisor, Africa Director, and&nbsp;former Cabinet Minister of Investment,&nbsp;Trade&nbsp;and Industry of Botswana</figcaption></figure>



With&nbsp;an&nbsp;abundance of land, natural capital and a growing, young population, Africa&nbsp;is undoubtedly&nbsp;the&nbsp;nature-positive economic&nbsp;superpower of the world.&nbsp;The protection of&nbsp;Africa’s nature could drive development across the&nbsp;entire&nbsp;continent.&nbsp;A nature-positive economy is regenerative and brings widespread&nbsp;economic opportunity including&nbsp;youth employment&nbsp;while protecting biodiversity.&nbsp;With&nbsp;access to&nbsp;the&nbsp;global&nbsp;voluntary&nbsp;carbon market;&nbsp;valuing and commercializing nature assets could unlock new financing opportunities for development for the Africa.&nbsp;This&nbsp;market, operating with integrity,&nbsp;equity&nbsp;and transparency,&nbsp;could&nbsp;help Africa&nbsp;deliver on three&nbsp;fronts: nature, climate&nbsp;and development.



<h2 class="wp-block-heading">Nature: the perils and possibilities </h2>



From savannahs&nbsp;to deserts, Africa is home to numerous unique and&nbsp;rich&nbsp;habitats.&nbsp;Given this&nbsp;range of ecosystems, it is perhaps unsurprising that&nbsp;the continentis home to at least&nbsp;<a href="https://www.fao.org/3/ca7948en/ca7948en.pdf" target="_blank" rel="noreferrer noopener">25% of&nbsp;our planet’s&nbsp;biodiversity</a>.&nbsp;As well as endemic species of mammals, birds and plants, many countries boast vast and ancient tropical forests.&nbsp;Many local people and communities live in these forests and depend upon them for their subsistence and everyday livelihoods. However, the benefits of these ecosystems extend&nbsp;far&nbsp;beyond the countries within which they exist. For instance, the forests of the Congo Basin are frequently referred to as the ‘lungs of Africa’as it is&nbsp;the world’s largest carbon sink. Crossing six countries, this forest&nbsp;<a href="https://www.worldbank.org/en/news/feature/2022/10/24/journey-into-the-congo-basin-the-lungs-of-africa-and-beating-heart-of-the-world" target="_blank" rel="noreferrer noopener">absorbs&nbsp;more CO2</a>&nbsp;from the atmosphere than the Amazon.&nbsp;&nbsp;



The natural world, particularly in Africa,&nbsp;holds huge possibilities for&nbsp;driving&nbsp;climate change mitigation&nbsp;and resilience.&nbsp;However, the potential of these natural resources is&nbsp;currently&nbsp;being eroded by a seemingly insatiable global appetite for food,&nbsp;fibre&nbsp;and&nbsp;timber. Indeed,&nbsp;nearly&nbsp;<a href="https://earth.org/deforestation-in-africa/" target="_blank" rel="noreferrer noopener">fourmillion hectares</a>&nbsp;of natural forest is destroyed across Africa each year, some of this is due agricultural expansion.However&nbsp;well as&nbsp;pushing many species to the brink of extinction,&nbsp;deforestation at this scale&nbsp;also&nbsp;has consequences for food security.&nbsp;



Wholesale&nbsp;deforestation or tree clearing&nbsp;can cause&nbsp;soil degradation.&nbsp;Tree roots transport water to the earth and decomposing leaves return&nbsp;essential&nbsp;nutrients the ground. Therefore, without trees,&nbsp;soil becomes&nbsp;drier&nbsp;and less productive for crops. Coupled with rising temperatures, there is a real risk of dusty, depleted topsoil blowing away and further reducing the capacity of the land for the people who depend on it. This is one factor&nbsp;behind the current food insecurity crisis faced by many people across Africa.&nbsp;There is a critical to&nbsp;need&nbsp;to adopt&nbsp;high-yield, adaptive&nbsp;<a href="https://climatechampions.unfccc.int/call-to-action-for-climate-resilient-sustainable-food-systems-in-africa/" target="_blank" rel="noreferrer noopener">nature-positive agricultural practises</a>&nbsp;whilst not expanding agricultural land further.&nbsp;



So&nbsp;if we work with nature rather than against it, by reversing deforestation and restoring degraded land then prospects for food security, livelihoods and economies will improve.&nbsp;<a href="https://www.iucn.org/resources/file/regenerative-agriculture-report-opportunity-businesses-and-society-restore-degraded" target="_blank" rel="noreferrer noopener">A study last year</a>&nbsp;found that if regenerative agriculture is practised on just 50% of African farmland, it would equate to USD 17 billion in savings to farmers and companies each year, as well as reduction in soil erosion, improvements&nbsp;in&nbsp;water filtration rates and nitrogen content.



<h2 class="wp-block-heading">Funding climate justice</h2>



Africa’s forests&nbsp;not only benefit the continent but&nbsp;offer&nbsp;a vital&nbsp;climate service to the planet&nbsp;which we need to conserve and harness at all costs given the climate emergency upon us.&nbsp;We need to see the nature services from this continent&nbsp;generate&nbsp;significant finance&nbsp;to&nbsp;drive local development.&nbsp;



Implementing such a&nbsp;transformation&nbsp;requires a climate justice approach.&nbsp;Climate justice&nbsp;recognises that without the promotion of&nbsp;human rights&nbsp;and&nbsp;the protection of nature,&nbsp;sustainable development&nbsp;is not possible.&nbsp;Many young climate activists are leading the campaign for climate justice&nbsp;across Africa.&nbsp;Now&nbsp;we&nbsp;need investors and governments&nbsp;to&nbsp;act&nbsp;with&nbsp;the same levels of commitment and enthusiasm&nbsp;shown by&nbsp;these&nbsp;courageous&nbsp;youth&nbsp;leaders.&nbsp;



Climate justice&nbsp;requires&nbsp;the&nbsp;urgent acceleration of&nbsp;finance at scale.&nbsp;This could be found from&nbsp;public funds, especially from climate funds&nbsp;which only&nbsp;currently&nbsp;account for&nbsp;<a href="https://www.climatepolicyinitiative.org/wp-content/uploads/2022/09/Landscape-of-Climate-Finance-in-Africa.pdf" target="_blank" rel="noreferrer noopener">$1 billion (3%) of climate finance</a>&nbsp;flows to Africa,&nbsp;and multilateral development banks (MDBs)&nbsp;who could use public finance to de-risk nature investments.&nbsp;Additionally,&nbsp;agricultural&nbsp;subsidies&nbsp;in the west and on this continent&nbsp;could be&nbsp;repurposed to fund this transition.&nbsp;



One&nbsp;avenue left relatively untapped&nbsp;is&nbsp;the voluntary carbon market.&nbsp;Two thirds of Africa’s&nbsp;carbon&nbsp;credits come from only&nbsp;five&nbsp;countries.&nbsp;This&nbsp;market holds&nbsp;huge potential to unlock private capital to fund projects that simultaneously protect nature&nbsp;and&nbsp;bring economic benefits to local people and communities.&nbsp;Africa could increase its engagement with the voluntary carbon market to ensure a good price, and greater access to finance.&nbsp;



This potential has been acknowledged by numerous key stakeholders across Africa&nbsp;which has led to&nbsp;the establishment of the Africa Carbon Market Initiative (ACMI),&nbsp;formed by SE for All, UNECA and Global Energy Alliance for People and Planet with the UN Climate Change High Level Champions as a supporting partner.&nbsp;This&nbsp;was&nbsp;<a href="https://climatechampions.unfccc.int/africa-carbon-markets-initiative/" target="_blank" rel="noreferrer noopener">launched&nbsp;this week&nbsp;at COP27</a>&nbsp;as a means of enabling more money to flow to nature-based projects and power&nbsp;Africa’s development, we’resupporting the ACMI.&nbsp;The initiative will be fundamental in the&nbsp;shaping of&nbsp;Africa’s engagement in&nbsp;the voluntary&nbsp;carbon market and&nbsp;in&nbsp;the protection of its precious natural ecosystems&nbsp;going forward.



<h2 class="wp-block-heading" id="h-mobilising-carbon-and-nature-based-payments">Mobilising carbon and nature-based payments  </h2>



The voluntary carbon&nbsp;market,&nbsp;especially&nbsp;the demand for&nbsp;nature-based&nbsp;carbon&nbsp;credits,&nbsp;is growing rapidly, and if Africa doesn’t mobilise&nbsp;soon there&nbsp;is a risk that we fail to shape our engagement with the market to ensure transparency,&nbsp;integrity and&nbsp;benefits&nbsp;which are retained on&nbsp;the continent. &nbsp; &nbsp;



Carbon markets, with clear operating principles, could help power nature positive development.&nbsp;The entry point for buyers must be clearly defined to drive high integrity demand from the outset. And there should be payment for biodiversity – over and above payment for carbon. Certain innovative conservation organisations are already piloting biodiversity payments, proving that valuing nature in this way is possible.&nbsp;



Above all, it is vitally important that&nbsp;there&nbsp;are continual, widespread&nbsp;consultations with&nbsp;governments,&nbsp;buyers,&nbsp;regional carbon&nbsp;market shaping&nbsp;initiatives&nbsp;as well as&nbsp;local communities to&nbsp;shape&nbsp;the way ahead&nbsp;for the voluntary carbon market in Africa&nbsp;and&nbsp;understand where finance can make the greatest impact.&nbsp;The best nature-based projects not&nbsp;only generate high quality carbon credits, but also bring lasting benefits for&nbsp;these&nbsp;local&nbsp;communities, the custodians of biodiversity. This is the context for the formation of the African Carbon Markets Initiative (ACMI), which has&nbsp;the aim of scaling supply and demand for carbon credit projects in Africa.&nbsp;The 2030 technical potential of Africa-sourced carbon credits is estimated at up to 2,370 MtCO2e based on existing, nascent, and innovative methodologies in sectors such as forestry, agriculture, blue carbon, renewable energy, household devices, livestock, engineered removals, decommissioning of fossil fuels and more.&nbsp;



For the sake of&nbsp;all our futures,&nbsp;nature must be valued appropriately, it must be included in the valuation of the economy and factored into GDP calculations. Carbonfinance&nbsp;and other forms of payment (e.g.&nbsp;biodiversity credits)&nbsp;generated from natural climate solutions can simultaneously restore and conserve nature while also providing significant funding to national development efforts across Africa.&nbsp;Now is the&nbsp;time for the world to recognise and reward Africa for its natural capital assets.

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Protecting nature to drive development: how Africa can be a nature-positive superpower

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1244663337-820x547.jpg" alt="" class="wp-image-421297" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1244663337-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1244663337-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1244663337-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1244663337-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1244663337-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1244663337-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Participants walk in front of COP27 logo in the Green Zone on the fourth day of the COP27 UN Climate Change Conference, held by UNFCCC in Sharm El-Sheikh International Convention Center, Egypt on November 10, 2022. COP27, running from November 6 to November 18 in Sharm El Sheikh focuses on implementation of measures already agreed during previous COPs. The Conference in Sharm El Sheikh focuses also on the most vulnerable communities as the climate crisis hardens life conditions of those already most disadvantaged. on the fourth day of the COP27 UN Climate Change Conference, held by UNFCCC in Sharm El-Sheikh International Convention Center, Egypt on November 10, 2022. COP27, running from November 6 to November 18 in Sharm El Sheikh focuses on implementation of measures already agreed during previous COPs. The Conference in Sharm El Sheikh focuses also on the most vulnerable communities as the climate crisis hardens life conditions of those already most disadvantaged. (Photo by Dominika Zarzycka/NurPhoto via Getty Images)</figcaption></figure>



Sharm El–Sheikh, Egypt, 14 November 2022:&nbsp;The hosting of the COP27 conference in Africa signifies a unique opportunity for the continent to assert its needs, challenges and outlooks, and most significantly to drive the African Position on just transition. Historically this conference, focused on climate change and its humanitarian ramifications, has marginalized Africa – whose contribution to humanity’s carbon footprint is minimal but whose people are suffering disproportionately from its effects.



But with this year’s gathering of world leaders occurring in Egypt’s Sharm El Sheikh, it is vital that Africa’s authentic voice is heard – this is the overriding purpose of Afreximbank’s mission at COP27. By inserting and asserting our perspective in the global climate change debate, we want to promote a mainstream African position, as a key stakeholder region.



Africa’s situation, and therefore the position articulated by Afreximbank, diverges from those of many other regional blocs, particularly in the more prosperous Global North. This continent’s long-term sustainable development agenda, which relies on traditional energy sources, is impeded by the ongoing campaign towards zero-carbon emissions, and the short-term livelihoods of millions of Africans are imperiled by a headlong rush towards net-zero.



With this in mind, Afreximbank’s participation in COP27 revolves around three core elements: an accelerated implementation of the African Continental Free Trade Agreement AfCFTA, which can reduce the continent’s reliance on carbon-intensive imports; the fostering of partnerships to promote an energy transition model that is more globally inclusive; and the maintenance of a pan-African position which achieves a balanced, environmentally sustainable economic development strategy. So, in partnership with likeminded organisations, Afreximbank’s participation at COP27 has been marshalled to articulate the following outcomes:



<ul class="wp-block-list"><li>Calling for the full Implementation of the AfCFTA towards the localization of industries to transition towards net zero emissions:</li></ul>



Afreximbank believes that the AfCFTA offers an opportunity for Africa to produce and consume goods within the continent, thereby reducing its carbon footprint. Erasing borders offers an opportunity for Africa to share technology, collaborate on science, and leverage its youthful population to achieve the development the continent warrants. In understanding this, Afreximbank supports the full implementation of the AfCFTA – which will help the continent pool resources to accelerate and speed up its development trajectory. At the COP27 conference, Afreximbank is rallying member states and development partners to accelerate the implementation of the AfCFTA. In so doing, Afreximbank called on these organisations and Governments to fund the AfCFTA Adjustment Fund. Capital from this Fund will be deployed to support both the public and private sectors to address short-term disruptions, while enabling the private sector to retool, reskill, and develop the necessary capabilities to produce value-added goods and services that can be traded competitively within the continent – catalysing the emergence of AfCFTA-led regional value chains.



<ul class="wp-block-list"><li>Fostering partnerships for an energy transition model that is more globally inclusive:</li></ul>



Currently, 600 million Africans have no access to electricity, while another 900 million lack access to clean cooking. However, Africa, a continent endowed with abundant resources, is home to 30 percent of the world’s mineral reserves, eight percent of the world’s natural gas, and 12 percent of the world’s oil reserves. Due to its low levels of development and large green energy sources, Africa emits the least of any region, contributing about 4 percent of total global emissions. Afreximbank believes that Africa must use its vast minerals to tackle the continent’s energy poverty and achieve its development plans under Agenda 2063. Exploring Africa’s natural gas reserves can double the continent’s electricity capacity, while adding less than one percent to global emissions. At Afreximbank, we believe Africa cannot achieve its development plans without access to energy. Hence Africa has the right to develop its resources, including fossil fuels, and we, as a Bank, are prepared to finance the continent’s energy just transition. At the conference, Afreximbank has confirmed its intention and willingness to continue to partner with petroleum producers to promote adaptation, support energy value chains and mitigate the costs of transition. With a well-articulated African position, we believe the continent’s economic development will be well positioned to grow while ensuring the continent’s energy transition progress is compatible with, and complementary to, the Sustainable Development Goals (SDG) as well as the continent’s long-term social and environmental objectives, as set out in African Union’s Agenda 2063: The Africa We Want.



<ul class="wp-block-list"><li>Supporting the common pan-African position around a balanced, environmentally sustainable, and responsible economic development strategy:</li></ul>



If our continent is to achieve sustainable development goals, we must take charge of its trajectory. Africa is blessed with rich mineral resources enough to finance its development, but the continent has failed to benefit from the exploitation of these resources. Afro-centric institutions are key to driving Africa’s economic agenda and building Africa’s resilience against climate change. Afreximbank has committed to supporting the African positioning for the continent’s benefit. At this critical time of global economic uncertainty, it is imperative that Africa coordinates and supports the common African position on economic development amidst global climate change. At the conference, Afreximbank is calling for adaptation financing models prioritising resilience in economies and ecosystems, in place of green financing models for mitigation – as this will generate new nomenclature bonds befitting the African situation. Moreover, Afreximbank has called for compensation for loss and damage and a transition from transactional to systemic finance – both crucial for our collective future.

COP27 In Sharm El Sheikh – Day 4

Afreximbank asserts Africa’s common position at COP27

This week marks the beginning of the 27th Climate Change Convention (CoP27), which is rightfully christened the African CoP as it takes place in the Egyptian City of Sharm El Sheikh, but also because it presents the best opportunity for Africa to take leadership in determining the future of its mitigation and adaptation course, particularly as pertains to financing.



&nbsp;While it has previously been the expectation that the developed countries, who incidentally are the largest contributors of carbon emissions would come around to sufficiently support developing countries in climate finance, this assistance has been slow to come. This has necessitated a shift in perspective to include the incorporation of mitigation and adaptation goals into national, regional, and continental planning and budgetary systems.



Africa remains one of the regions that are worst affected by climate change, even as it contributes the least of global emissions. Today, the changing precipitation patterns are undermining the continents food and water security. Food insecurity increases by 5–20 percentage points with each drought or flood in sub-Saharan&nbsp;Africa, and global warming is expected to melt Africa’s remaining glaciers in the next few decades reducing the availability of water, an essential component of agricultural production.



Ultimately, with agriculture being critical to Africa’s economic transformation, climate change would continue to increase the risk for agriculture sector investors, destabilize local markets and limit economic growth.



Faced with such risks, we must now arrive at the conclusion that Africa’s overreliance on foreign assistance may delay adaptation plans, and that the quicker way forward is to create own financing mechanisms, including the blending of public and private sector finance in de-risking investments in climate action.



For a rapid take-off, African governments and leadership must take charge and create a policy environment that encourages private-sector investments with a climate angle.&nbsp; Recent commitments, including the Africa Common Position at the 2021 UN Food Systems Summit, and more at the AGRF Summit this year, show an eagerness by African governments to position the war against climate change as a key development agenda. However, the commitments can only be validated by a policy direction that clearly brings out the central position of climate finance in the envisioned transformation.



The idea here is to mobilize private finance, which as at now, remains the biggest hope of meeting the continent’s climate goals. As of today, nearly 87% &#8212; or$20bn &#8212; of Africa’s annual climate finance emanates from public actors, with very limited contribution from the private sector. And with annual needs of $280bn to implement the continent’s Nationally Determined Contributions by 2030, it goes without saying that private sector investments are an urgent necessity, which can be quickened by shattering existing investment barriers through supportive policies. &nbsp;



Meanwhile, as governments create an environment that fosters local contribution to climate finance, private sector players must also independently devise ways of contributing to the war against climate change. The truth is, we all, in one way or another, suffer the adverse consequences of the warming climate, and private enterprises are not excluded. The inculcation of a climate agenda within the strategies of private businesses would, therefore, drive meaningful contribution to continental climate action.



We also expect more activity from scientists and researchers, who are now called upon to draft convincing plans and strategies to encourage the uptake of carbon credits and other reward systems for contributions towards climate change mitigation and adaptation. This community plays a key role in provoking rapid and far-reaching action across many sectors, and their dedication participation would lead to activities that mainstream climate action investment, across many different sectors.



Finally, Africa’s farmers, perhaps the biggest victims of climate change, must in their own small way contribute to climate action. Farmer groups must be active in educating their members of their role in mitigation and adaptation and we expect their dedicated contribution through such activities as the creation of communal tree nurseries and supporting of sustainable land management program that includes tree planting initiatives soil &amp; water management of degraded lands across the watershed.



But it is still important to reiterate that the world’s greatest emitters must remain accountable, and that we in Africa and other developing regions expect them to honor their $100bn annual climate finance pledge beyond the lips service.



In conclusion, we must realize that we are now at a change-point, where the business-as-usual approach must be discarded, and new strategy that engages all our participation in climate action is embraced. For Africa’s leaders, this is the right time for transformation, and in the next two weeks of the African CoP we expect to see more local and sustainable climate finance initiatives.



The writer is the former Prime Minister of Ethiopia, and the current Board Chair of the AGRF Partners Group. The AGRF is Africa’s premier convening platform for inclusive agricultural transformation.

H.E.-Hailemariam-1

African countries must create their own climate finance plans

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="551" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1439677821-820x551.jpg" alt="" class="wp-image-421087" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1439677821-820x551.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1439677821-300x202.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1439677821-134x90.jpg 134w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1439677821-768x516.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1439677821-1536x1033.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/GettyImages-1439677821-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>SHARM EL SHEIKH, EGYPT &#8211; NOVEMBER 07: A sign hangs over the main entrance on day two of the UNFCCC COP27 climate conference on November 07, 2022 in Sharm El Sheikh, Egypt. The conference is bringing together political leaders and representatives from 190 countries to discuss climate-related topics including climate change adaptation, climate finance, decarbonisation, agriculture and biodiversity. The conference is running from November 6-18. (Photo by Sean Gallup/Getty Images)</figcaption></figure>



Ahead of her panel discussion at the Friends of South Africa session at COP27 today, Chief Sustainability Officer Nazmeera Moola discusses why and how we must navigate the transition to net zero across high emitting countries and companies



07 November 2022:&nbsp;The transition to net zero will not be linear or simplistic, especially for companies in carbon-intensive emerging market economies like South Africa.&nbsp; A high-emitting company of today will only have a role to play in the net zero economy of tomorrow if it has an ambitious, credible, and implementable plan to transition toward a greener, cleaner future.&nbsp;



As asset managers who are invested in these companies, it is our responsibility to support their transition to net zero, to use our shareholder vote responsibly and to approach decarbonisation from a real-world world-perspective and not from our own portfolio perspective.&nbsp; We do not support ‘portfolio purity’ or divestment.



Remaining invested in the high carbon emitters in our existing portfolio, specifically those in emerging markets, is the right thing to do. It is not about where the company’s or country’s carbon position is today – rather it is about their willingness and ability to move the needle on their carbon emissions. In contrast, divesting from high emitters to cleanse the portfolio does nothing for contributing to real-world decarbonisation.



Corporate South Africa is making progress, with several firms pledging to achieve net-zero emissions by 2050, inclusive of companies from the hard-to-abate industries, like cement manufacturer PPC, paper and pulp producer Sappi, and Sasol.



However, most companies globally, but particularly in emerging markets – do not yet have a clear plan on how they’re going to get to net zero by 2050. Therefore, it is our role as shareholders to encourage, measure and engage the high emitters in our portfolio on their transition, to go on the journey of transition alongside them, with special focus on emerging markets.&nbsp; To ensure that we do this with integrity, we have developed an in-house ‘Transition Plan Assessment Framework’ that scores our heaviest emitters on three key principles: level of ambition, credibility of plan, and implementation of plan.



Transition plan assessment principles



1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level of ambition



Ambition is critical to signal how seriously a company takes climate risk and it’s transition strategy. Measuring ambition can be subjective, and therefore including objective indicators&nbsp; ensure a robust, scientific and&nbsp; credible assessment. This can be achieved by assess the following three indicators:



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disclosure of Scope 1, 2 and 3 emissions&nbsp;(all categories) with independent verification and public disclosure via a disclosure platform such as the Carbon Disclosure Project



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time bound reduction targets&nbsp;across short, medium and long term of Scope 1,2 and 3 emissions



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Official commitment to achieve net zero by 2050 or sooner, with 1.5C science-based targets and SBTi approval (where possible)



2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credibility of plan



The second principle on which we evaluate plans is on credibility; namely whether the company has a time-bound, clearly financeable, and just transition strategy. Indicators of a credible strategy include:



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if the plan is based on existing low-carbon technology rather than new, unproven technologies;



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if the company is not relying on divestment of high-emitting assets or carbon offsets to decarbonise; and



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if the company has planned to generate significant revenue from low-carbon products and services.



Additionally, financial planning and allocation to transition is critical to consider. The capital expenditure requirements, the impact on revenues and expenditures of this plan, and whether the company can afford it are all indicative of how seriously the company is taking transition and of the potential for transition success. Included in the assessment of transition is the consideration and measurement of social impact to ensure that the transition is sustainable both for people and planet.



3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Implementation and measurement



Engagement and lobbying alignment signify alignment of the company plan with the broader environment in which the company is embedded. Additionally, good governance structures, with clear oversight of transition-related strategy at board level is a good indicator that the transition plan has full company-level buy-in, ensuring transparency and accountability.



Indicators of progress are the final element of measurement. Carbon reduction, of course, is the key metric of success. But carbon is not the only consideration, especially in the early years of transition. Rather, we look for tangible signs of progress, including:



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;investment in transition-related capacity building;



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;new partnerships and acquisitions that enable the company to transition; and



·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a growing share of green revenues generated by the company



It’s about progress, not just pledges



Achieving net zero is a global problem. The ideal outcome would be for sectors and countries that can achieve it more easily to decarbonise faster, and for hard-to-abate sectors and developing countries to have slower pathways.&nbsp;



It is essential to South Africa’s economy to execute on the decarbonisation strategy. Local corporates have begun to engage, and in some instances, taken the lead on the opportunity and risk presented by the transition. The approach we are taking enables us to have a clear view on where we are today, and where we are going in light of where we desire to be. Net zero offers both a threat and an opportunity for South Africa and at Ninety One we continue to stand firm in our position of support for both a country and at company level for a just transition to a low-carbon, thriving future.

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