30th Sep 2023

EU pledges support for African finance reform at summit

  • EU Commission president Ursula von der Leyen speaking at the Africa Climate Summit in Nairobi, Kenya (Photo: Africa Climate Summit)
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Climate change is "relentlessly eating away" at Africa's economic progress, Kenya's president William Ruto said on Tuesday (5 September) as the first-ever Africa Climate Summit kicked off.

"And those who produce the garbage refuse to pay their bills," he told an audience that included EU president Ursula von der Leyen, senior officials from China, and US climate envoy John Kerry.

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According to Ruto, the rapidly growing African continent of more than 1.3bn people is "losing five to 15 percent of its gross domestic product growth every year" to the widespread impacts of climate change.

This week, one of his main efforts has been to combine a positive message about Africa's potential with a call for an ambitious reform of the world's financial architecture that results in African countries paying "five times more" than other countries to borrow money on financial markets.

This has resulted in "31 out of 37 heavily-indebted countries are in Africa," Kenya's cabinet secretary for the environment, Soipan Tuya, told delegates.

EU promises

"Climate action can be one of the main drivers of African growth. But Africa needs massive investment, and Europe wants to be your partner," von der Leyen told delegates, seemingly underwriting African calls for reform. "We fully support the need for multilateral development bank reform."

She was scheduled to discuss the topic further with Ruto but left before the panel could start. "Due to delays in the programme, it wasn't possible for president [von der Leyen] to take part," commission spokesperson Tim McPhie told EUobserver, leaving open the question of how the EU might support Africa's bid for reform.

When listing EU priorities for a series of big meetings coming up, she named carbon pricing and setting global climate targets — but did not mention an expansion of multilateral lending, spearheaded by Ruto.

Directly following the summit this weekend G20 finance ministers are scheduled to meet in Delhi to discuss a tripling of the available lending of the world's multilateral development banks [MDBs] like the World Bank and the African Development Bank.

"We believe they can do better," Ruto said on Tuesday. But divisions among G20 members have so far blocked meaningful progress.

Von der Leyen did promise to allocate "one billion dollars" [€930m] to 'derisk' private investments in emerging markets, which she said could help attract an additional €20bn.

In the margins of the summit, von der Leyen and Ruto also launched the Green Hydrogen Strategy and Roadmap for Kenya, meant to kickstart the east African country's hydrogen industry.

This will be supported by the Global Gateway, the EU's investment strategy that the commission claims will mobilise €300bn of financial investments — €150bn for Africa, €135bn of which is estimated to come from private investors.

The Global Gateway initiative has been met with scepticism from the start, including by many leaders in Africa, for lacking fresh financial commitments from EU members and for prioritising green energy over gas reserves they say can help Africa grow.

"Africa must use its natural gas," the president of the African Development Bank, Akinwumi Adesina, told delegates on Tuesday. "Doing so will add only 0.5 percent to global emissions. Give us space to grow."

African fissures

This highlighted African disagreements over the role gas should play in the transition. Nigeria, Mozambique and Senegal (which hold substantial natural gas reserves) have lobbied hard to continue European financial support for new gas projects in Africa.

Senegal's president Macky Sall has previously called plans to end the financing of gas exploration "a fatal blow" for emerging African economies.

Missing from the summit were the leaders of several of Africa's largest economies, including South Africa, Egypt, and gas and oil-rich Nigeria.

Kenya's Ruto, who holds a PhD in plant ecology and authored several recent scientific papers on the subject, has argued that Africa should and could skip fossil fuels and go directly to green modes of production—a strategy he describes as "technological leapfrogging."

"We need robust industrialisation, but we must go green fast before industrialising and not vice-versa as the advanced countries had the luxury to do," he told delegates.

Ruto took pains to project a positive image during the proceedings. "We have been profiled negatively, the continent of disease, war, poverty. But we are stepping forward to say: look, we are the continent of opportunity," he said. "Until the lion learned to write, all stories glorified the hunter. We have learned the art of writing. That is why we are going to write our own narrative."

Despite differences, Ruto called on African leaders to commit to concluding the summit with a unified African position on the scale-up of affordable financing, funding mechanisms for support in climate adaptation and increased investments in renewables in the lead-up to the 28th UN climate conference taking place in Dubai in December.

Kenya hosts first-ever Africa Climate Summit

Kenyan president William Ruto launched the inaugural Africa Climate Summit in Nairobi and showcased the continent's potential as a clean energy powerhouse. Africa contains 60 percent of the world's solar potential, massive geothermal capacity and CO2-absorbing tropical forests.


Africa climate week proves continent not reliant on West

The Nairobi summit ultimately marked both the first unified voice of the continent in the fight against climate change, and the first time such an ambitious vision of Africa's clean energy prospects has been tabled at such a high-level forum.

IEA says: Go green now, save €11 trillion later

The International Energy Agency finds that the clean energy investment needed to stay below 1.5 degrees Celsius warming saves $12 trillion [€11.3 trillion] in fuel expenditure — and creates double the amount of jobs lost in fossil fuel-related industries.


How do you make embarrassing EU documents 'disappear'?

The EU Commission's new magic formula for avoiding scrutiny is simple. You declare the documents in question to be "short-lived correspondence for a preliminary exchange of views" and thus exempt them from being logged in the official inventory.

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