2023-05-29 19:03:45
ALGIERS- Africa, this continent rich in natural and human resources, which represents barely 3% of global greenhouse gas emissions, but which pays the heaviest consequences, is determined to mobilize the necessary funding to fight once morest the effects of climate change, by adopting innovative financial solutions, involving more of the international community and the private sector, while working to improve the attractiveness of investments.
To achieve this, a reconsideration of the scale and manner of the involvement of the private sector, which currently contributes only 14% of climate finance in Africa, therefore seems an unavoidable option, with the keyword: “de-risk” green investment to encourage this sector to become more involved in climate action in Africa, while accelerating the implementation of initiatives encouraging its development, such as the agreement establishing the Free Zone African Continental Exchange (ZLECAF).
But the success of such an approach also requires more state guarantees for the benefit of private investors, in addition to an overhaul of the tools and approaches of multilateral banks and development financial institutions.
This is the summary of the roadmap that emerged from discussions between governors of central banks and African finance ministers, including Algeria’s first treasurer, Laaziz Faid, meeting as governors of the African Bank of Development (AfDB) which held its 58th Annual Meetings from May 22 to 26 in Sharm el Sheikh in Egypt on the theme: “Mobilizing private sector financing for climate change and green growth in Africa”.
In the presence of some 4,000 participants, from 81 shareholder countries (54 African and 27 outside the continent) of the most important regional financial institution, the Board of Governors of the AfDB, whose presidency was ceded by Egypt to Kenya, as well as several African Heads of State and Government and experts, agreed that Africa, which, despite all the headwinds, should achieve good growth in 2023-2024 (4% and 4.3%), is obliged to find urgent solutions to finance its climate action, suffering from an average annual deficit of 127 billion dollars.
Thus, development banks and financial institutions “should become less risk averse, by prudently reducing their capital adequacy ratios, establishing tailor-made capital and liquidity mechanisms and reassessing existing regulatory standards. in terms of capital and other prudential standards, to gradually move from project financing to financing a sustainable system-wide transition”, recommended the report on the African economic outlook for 2023, in this sense, presented at meetings.
Convinced that “Africa’s future is green”, the President of the AfDB Group, Akinwumi Adesina, called on developed countries to keep their commitments in terms of supporting climate action in Africa, promises up to there “unkept”.
The current president of the African Union (AU), Azali Assoumani, pleaded, in turn, for the increase of the Special Drawing Rights of the IMF allocated to the countries of the continent. Additional resources that must be “channeled quickly to the countries most in need, including through the multilateral development banks”.
==Algeria’s commitment strongly welcomed==
This edition of the AfDB’s Annual Meetings was, moreover, another opportunity to salute Algeria’s firm commitment to Africa, a commitment affirmed and reaffirmed, on each occasion, by the President of the Republic, Mr. Abdelmadjid Tebboune.
“I salute Algeria’s efforts to support African countries with very low incomes. I also salute the commitment of the Algerian State for its contribution to the reconstitution of the African Development Fund, with 10 million dollars, i.e. a very important contribution, which makes Algeria one of the largest African contributors to this fund,” Adesina told APS.
“I appreciate our commitment and our collaboration together. Algeria is a very important country for the AfDB”, he argued, while expressing the AfDB’s “support” for the Trans-Saharan Gas Pipeline (TSGP) project linking Nigeria to Europe via Algeria.
In his last interview with the Algerian media, President Tebboune had emphasized the need for Algeria, which decided to inject one (1) billion dollars into the budget of the Algerian Agency for International Cooperation to Solidarity and Development to finance vital projects in African countries, to have an “effective presence” in the continent and to “focus on Africa’s development efforts”.
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