JON FOSTER-PEDLEY: It is in our interest to turn Africa’s economies green

As the industrialised world looks to offset its environmental impact by leaning on the developing world, Africa is starting to assess how it can leverage the situation to its economic, social and environmental advantage.

In this respect the Africa Climate Summit 2023, hosted by Kenya from September 4-6, came at a most opportune moment. The theme for the event was “driving climate-positive growth and finance solutions for Africa and the world”, so it was to be expected that a significant focus area would be the use of carbon credits.

Carbon credits as a mechanism enable big companies and multinationals to offset their emissions elsewhere in the world by investing in green projects such as tree planting, renewable energy and encouraging clean cooking methods. Usually, these climate-friendly projects are located in developing Global South countries, while the polluters are in the global north.

Dr Akinwumi Adesina, president of the African Development Bank Group, summed up the mood and agenda at the summit well with this comment: “Africa’s GDP must, therefore, be revalued based on its carbon sequestration and biodiversity, which provide global public goods. If this is done, the debt-to-adjusted GDP ratio of several African countries will be much lower and they will have greater headroom to obtain more financing to support their development, including investing in the greening of their economies.

“We must turn Africa’s economies green, not because others ask us to do so but because it is in our interest to do so. Africa must develop its own carbon markets, property price its carbon and turn its vast carbon sinks into huge sources of wealth. Africa cannot be nature rich and cash poor. Africa’s needs must be front and centre... We must be the vuvuzelas of climate financing for Africa.”

It all sounds very positive and potentially impactful, but is this the sort of radical thinking and mindset shift that African leaders should be embracing? Or are we once again falling under the spell of the developed world puppet masters and attaching ourselves to their agenda?

Who is pulling the strings?

One of the buzzwords that kept ringing out at the Kenyan summit was “equity”, but as long-term solutions with the ability to radically change the face of African economies the dial seems stuck on options that don’t address the underlying problems and simply buy time as they take the heat off the developed world.

Of course, it’s hard to ignore the lucrative payday the carbon offset option could offer a continent like Africa, which faces such a depth of social and economic challenges. As Reuters’ Duncan Miriri reported on the opening day of the summit: “The offset market was worth about $2bn in 2021 and Shell and Boston Consulting Group jointly forecast in January that it could reach between $10bn and $40bn by 2030.”

The current drive and logic is premised on the assumption that Africa could secure a hefty slice of this pie, but as yet Africa doesn’t attract significant climate financing due to risk concerns associated with investing on the continent — just $30bn annually, according to the Climate Policy Initiative. That’s 11% of the $277bn the continent needs to address issues like mitigation, infrastructure development, renewable energy investment and food security.

This means even as the climate crisis mounts African countries remain financially ill-equipped to deal with the mounting pressures that will come with infrastructure damage due to flooding, food insecurity as a result of droughts and the migration of people into cities and across borders.

It is for this reason that I would argue Africa has reached a seminal point in its development and thinking and a new mindset is needed, which means a new approach to learning and the development of leaders is critical.

We need system-savvy leadership

This provocation supports the thinking of the Business Schools for Climate Leadership Africa (BS4CL Africa), which was launched in late 2022 during the UN’s Climate Change Conference in Egypt. A pan-African business school collaboration, which falls under the banner of the Principles for Responsible Management Education Chapter Africa, the conversations being had by BS4CL Africa include calls for deeper partnerships with business and among African business schools, increased climate-related research, sharing resources, overhauling curricula and helping to equip Africa’s leaders with the multifaceted tools they will need to manage this crisis in an astute and forward-looking way. 

In large part, Africa’s leadership across business, government and society has paid lip-service to the vulnerability of the African continent in the face of global warming and harmful emissions, though Africa and much of the global south contributed substantially less to the problem in the first place. The potential effects are many and systemic in nature, meaning that companies and governments in Africa cannot afford to look at problems — or solutions — in isolation. They need to be highly aware of the implications across the entire ecosystem.

If Africa is able to effectively leverage carbon offsets as a way of advancing a new growth agenda aimed at enhancing prosperity for all, then taking on the West’s problems will ultimately serve Africa. However, in the absence of a clear African agenda and meaningful action directed towards projects and protections with a long-term benefit outlook, then this thinking will inevitably backfire.

Consider, for instance, the ongoing issue of plastic waste produced in countries such as the UK and US, which for years has been bundled up and shipped to the likes of Malaysia, Vietnam and Turkey, where it is often burnt for fuel or illegally dumped in rivers, thereby destroying ecosystems and the way of life of people who had no hand in creating this problem in the first place. Issues like this can be addressed by meaningful policy change and sustainably minded corporate leadership, as well as through research that unearths the causes and effects of climate actions.

In each of these spheres, African business schools have a critical role to play as provocateurs of system-wide change and transformation. We have the position in society and the trust to foster new ways of thinking practically, in terms of how we construct our own role in society to become beacons for the rest of society, as well as politically, as we encourage interdisciplinary and cross-sector engagements. Finally, we are able to expose current and future leaders to new ways of thinking about climate change challenges that take into account not only corporate and government views, but those of people on the ground. This is a pretty impactful position to be in.

I challenge my fellow deans and African leaders as a whole to take the issue of climate change seriously and to support meaningful research and collaborations with African and global bodies to guide us towards intelligent decision-making that looks not just at the now, but also well into the future. We need to ask ourselves if all the potential touchpoints of our current focus have been well considered and what the best collective solutions are for Africa and her people. Above all, as we try to read the room, we need to be honest about who is playing the puppet and who is playing the puppet master.

• Foster-Pedley is dean and director of Henley Business School Africa, chair of the Association of African Business Schools, and co-author of “Climate Action: An Existential Priority for African Business Schools”.