While global experts opine that the continent of Africa is ripe for green investment, the truth is that still only 3% of climate finance comes to Africa.
With the continent continuing to face major challenges, especially in the energy sector, investors could benefit from investing in Africa with green opportunities amounting to $3 trillion. It had been proved that private investment on the continent are responsible for some of the highest returns compared to other emerging global economies. Especially rural, poor areas across Africa could open up mutually beneficial endeavours; to both end users of green energy and investors.
Climate change had already irrevocably altered business and governance, providing a now-or-never scenario to change the world for the better. African governments are committed to enable private investment, never made clearer that at the last Intra-African Trade Fair in South Africa.
In the wake of COP26 and in line with Sustainable Development Goals, the African Union’s Agenda 2063 had implored all Africans, not only governments, to combat havoc-wreaking climate change. Scientists are for once in agreement that Africa would experience the worst effects of climate change despite contributing the least to harmful and toxic gas emissions.
It is all good and well to make promises and attend global climate change sessions, the bottom line is – what can be actively done and in the shortest possible time to combat this through the Nationally Determined Contributions protocol?
Many case studies show the potential for climate resilient infrastructure. Various entrepreneurs across Africa had already tapped into solar and wind energy, while others had latched onto the benefits of green bonds, with many successful business operations in climate trade and investment.
With food and water scarcity already leading to wars, disease and death on the continent, it is imperative that especially energy and agricultural opportunities be globally highlighted for possible investors to take advantage of the large consumer base in Africa. In Cameroon alone, almost 40% of the rural population have no access to electricity. This amounts to 2.5 million households in just one country. The off-grid market is huge and with the support of the African Development Bank’s Green Climate Fund for climate-smart initiatives, African governments should tap into these and ensure that proper rules and regulations are in place to secure investor confidence.
Where there’s a challenge, there’s a business opportunity – Dr Mima Nedelcovych, AfricaGlobal Schaffer’s chairman and a co-chair of the US Business in Africa Awards.
The Africa Continental Free Trade Area (AfCFTA) act had been adopted by most African countries with 55 member states. Rapid implementation of trade agreements had already come into fruition at the beginning of 2021. Red tape, bureaucracy and tariff barriers should be urgently addressed to kick-start the more than $4 trillion African trade opportunities.
However, while climate change is speeding up faster than predicted, to make Africa’s global trade and investment a reality, much work needs to be done. There is a planet to be saved and a continent with innumerable resources at the ready to change the future to green. If this is not taken advantage of soon, there may not be a future to speak of.