Davos, Re-Risking Africa and the Green Economy
By Michael Street
Jan. 25, 2013
De-Risking Africa was the title of the main session on Africa at the 2013 World Economic in Davos, Switzerland. On 23 January a distinguished panel, including two African presidents, two from the private sector and one human rights lawyer met to discuss ways Africa’s leaders are mitigating risk on the continent.
Investor confidence is crucial to Africa’s remarkable growth story which has reached a critical stage: ‘Africa is the last frontier for investment’; ‘Africa is the new engine of global growth’; ‘Africa will feed the world’; ‘Africa will rule the 21st century’. By 2050, Africa’s economy, some say, could be worth $29 trillion, more than the US and EU combined. If this is to be ‘Africa’s Moment’, risk is a key issue, not only for investors but for the global economy.
Although most panellists were not keen on the “de-risking” title they put forward some good arguments and reasons to believe that Africa’s risks could be managed and therefore mitigated. Presidents Jacob Zuma (South Africa) and Goodluck Jonathon (Nigeria) added that investments worldwide were risky and Africa was no more risky than anywhere else. Among the areas singled out for attention were: continued economic growth, infrastructure, communications, governance, democratic decision-making, intra-Africa trade, education, youth employment schemes and labour relations.
However, with a few adjustments here and there, this discussion could have taken in place in the last century. It seemed to assume business-as-usual would continue. There was no mention of climate change which is the biggest risk factor in Africa. Neither was there any mention of the green economy as the only long-term, viable means to manage risk in the 21st century, not only in Africa but worldwide. Although Africa’s “economic transformation” was cited at Davos as necessary for mitigating risk there was no hint that Africa’s Green Revolution and the green economy it is building could play a central role.
In any human endeavor risk is caused by unknowns. In modern accounting systems based on Gross Domestic Product the unknowns are the hidden costs of economic growth not measured by GDP. In Africa, as we have seen in the past, the hidden costs of the current development model, or business-as-usual, can be rapid and severe. A major hidden cost is inequality which, according to international institutions including the International Monetary Fund, the World Bank and the Africa Progress Panel, is already threatening Africa’s growth.
Among the many definitions a green economy is an economy where the hidden costs of growth – environmental, social and even long-term economic – are accounted for and minimised. Mitigating risk means mitigating hidden costs and the only known way to do this is by building green economies, something Africans have been working towards for the past 20 years in their ‘quiet revolution’. The culmination of the continent’s green progress was Africa’s Consensus to the UN’s Rio+20 ‘Earth Summit’ last June, a once-in-a generation event where the global green economy was the main theme.
Africa’s 13-page statement, which outlined the continent’s challenges, achievements and huge green growth potential, was virtually ignored by the rest of the world. More worrying still is that, with few exceptions, Africa’s green economy is absent in the programmes of the major summits and conferences on Africa this year.
One of the most interesting comments at the Davos session came from Rwanda president, Paul Kagame, who was in the audience. “For me the major problem I see is that Africa’s story is written from somewhere else and not by Africans themselves,” said Kagame amid applause from the audience including several African leaders and business executives. “…That is why the rest of the world looks at Africa and Africans, and wants to define us. They want to shape the perception about Africa.”
If this is to be Africa’s Moment, this is the moment for Africans to tell their green growth story to the world. Putting the green economy into Africa’s growth story through this year’s international meetings on Africa could be one of the most effective ways to accelerate an essential and urgent process that will ultimately benefit us all. This is moment for Africa’s ‘green explorers’ to speak up.
About the Author: Michael Street’s connections with Africa began 40 years ago. In the 1970s and 1980s he worked in a number of African and Asian countries as a ‘brown’ development expert on various agro-industrial projects. He first visited Ethiopia in 1975. During the 1990s and early 2000s he travelled extensively in Ethiopia and lectured widely on the country’s history and ecology. Since 2001 he has been based in Sicily where he is establishing two small biosphere reserves as part of an initiative to understand and expand Sicily’s green economy.