Claver Gatete on financing Africa's inclusive green economies

At the 56th Session of the Conference of Ministers of Finance, Planning, and Economic Development in Victoria Falls, Zimbabwe, Claver Gatete, UN Under-Secretary-General and Executive Secretary at the Economic Commission for Africa, highlighted the urgent need for financing Africa's transition to inclusive green economies. Gatete emphasized the pressing issue of climate change, citing estimates from the G20 that indicate $1.8 trillion will be required for climate financing by 2030, with an additional $1.2 trillion needed for development financing. This staggering amount underscores the devastating impact of climate change on African countries, particularly those that are already vulnerable and impoverished. Gatete pointed out the visible effects of climate change, such as droughts, floods, and infrastructure damage, all of which have severe repercussions on agriculture and livelihoods. Moreover, with a decline in aid, foreign direct investments, and access to concessional financing, African nations are grappling with the challenge of finding alternative and innovative sources of funding for development and climate initiatives. In response to these challenges, discussions at the conference revolved around exploring innovative financing mechanisms, including green bonds, blue bonds, and leveraging natural resources like carbon credits. However, concerns were raised about the low prices of carbon credits in Africa compared to other regions, necessitating a reevaluation of strategies to attract private investment and stimulate economic growth. Gatete emphasized the critical role of regional integration in mobilizing private capital for green bonds, climate financing, and carbon market trading. He highlighted the African Continental Free Trade Area as a key initiative to create larger markets and attract investments, enabling countries to pool resources and de-risk investment opportunities. By fostering regional value chains and promoting economic integration, Gatete underscored the potential for substantial investments that could drive sustainable development and job creation across the continent. Gatete also addressed the importance of de-risking strategies and mitigating factors to attract private capital, emphasizing the need to assess project risks and create a conducive environment for private sector investments. By prioritizing de-risking measures and investing in strategic sectors like agro-processing zones, African nations can enhance economic resilience, boost exports, and address critical issues such as food security. Moreover, Gatete emphasized the role of technology in advancing Africa's economic development, particularly in areas like digital connectivity and artificial intelligence. Recognizing the vast potential of technology to drive growth and innovation, Gatete stressed the importance of closing the digital divide, expanding broadband infrastructure, and leveraging digital tools for transformative change. Gatete reaffirmed the imperative of investing in technology to accelerate economic progress and ensure Africa remains competitive in the global landscape. Overall, Gatete's insights underscored the urgency of unlocking Africa's green economies through innovative financing mechanisms, regional integration, and technological advancements.