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African Leaders Must Prioritise Climate Risks—Verkooijen

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Professor Patrick Verkooijen Climate Risks

By Kester Kenn Klomegah

In this insightful and wide-ranging interview, Professor Patrick Verkooijen, Chief Executive Officer of Global Center on Adaptation discusses the organization’s establishment, its main objectives, challenges and plans for the future.

The Global Center on Adaptation in Africa (GCA Africa), based at the African Development Bank (AfDB), has launched the Africa Adaptation Acceleration Program to mobilize $25 billion to scale up transformative actions on climate adaptation. It hopes to mobilize funds and bridge the financing gap for climate adaptation across Africa. Here are the interview excerpts:

What does the setting up of the Global Center on Adaptation mean for Africa?

Africa is on the frontline of our climate emergency. Five out of the 10 world’s most climate-vulnerable countries are in Africa. Contributing a meagre 5 per cent of global greenhouse gas emissions, Africa is more victim than a contributor to climate change, with the bulk of its emissions deriving from deforestation and poor land-use practices. Climate change is already negatively affecting the continent’s progress towards the Sustainable Development Goals.

Its impacts are showing up in extreme weather events such as floods, droughts and heatwaves affecting most of the continent with severe economic consequences. Hurricanes Idai and Kenneth in 2018 that hit Mozambique, Zimbabwe and Malawi affected over 3 million people, led to the death of over a thousand people and damaged infrastructure worth about $2 billion.

Compounding the already enormous climate challenges, COVID-19 has ushered in an era of multiple, intersecting systemic shocks, and one of its casualties has been our capacity to adapt and respond to escalating climate risks.

Investment in climate adaptation fell in 2020, even as more than 50 million people were affected. There is no doubt the adaptation challenge for Africa is extraordinary. For us, although the adaptation challenge is a global agenda, our priority is Africa.

We must make up for lost ground and lost time by accelerating action on climate adaption and resilience. Climate change did not stop because of COVID-19, and neither should the urgent task of preparing humanity to live with the multiple effects of a warming planet. If the virus is a shared global challenge so too should be the need to build resilience against future shocks.

In September last year, in the midst of the pandemic, we virtually launched our Africa office hosted by the African Development Bank in Abidjan, Côte d’Ivoire. Many African Heads of State and Government participated – they understand how vital accelerated adaptation action is because they are living with the impacts of climate change every day. Our rationale is that it doesn’t make sense to have an Africa office in isolation. We also have offices in Beijing and Dhaka because we think solutions that work well in South Asia, for example, could potentially also be translated to Africa and vice versa.

Do you target regions and different segments of the population in Africa? How do you determine and direct the activities of the GCA-Africa?

If we fail to include fairness and equity in how we adapt to a warming planet, we risk pushing millions of more people into poverty. We know how that story ends – with more conflict, migration and instability. With that in mind, we work closely with our partners including the African Adaptation Initiative and the African Development Bank to ensure our activities are directed towards where the need is greatest. Partnering with existing networks, platforms and organizations ensure that we don’t duplicate existing resources but can play a role in effectively filling the gaps that exist.

Right now, global, regional, national, subnational and local entities are working simultaneously, and in parallel to support adaptation actions and many important initiatives exist. However, the speed and scale of adaptation action is grossly insufficient to meet the demand and many stakeholders are not connected to the resources, knowledge, expertise or support others can offer them.

GCA is key to bridging this gap while ensuring at the same time that best practices can be replicated and scaled up in order to catalyse progress towards resilience in the most effective and efficient way.

Africa’s development – be it in infrastructure, agricultural production, urban development, and youth empowerment – can have a different path from other regions. Africa can have a development that is based on a deep understanding of climate risks for planning, resilient approaches with nature and people at the centre, and continuous innovations in technology, financing, and governance for a climate-smart-adapted future.

What are the long-term priority objectives here? But in the short-term, what projects would you tackle in Africa?

The short-term objective, in terms of the programs, is to make sure that when COVID-19 support packages are developed — and they are being developed in real-time by the IMF [International Monetary Fund] and other partners — they have resilience or adaptation action embedded in them.

Current estimates of the cost of climate change to Africa are between $7 – $15 billion per year. African countries are projected to experience clear detrimental macroeconomic consequences from climate change over the coming decades. The IMF estimates that this cost could rise to $50 billion by 2040, about 3% of the continent’s GDP. It is estimated that climate change could result in lower GDP per capita growth ranging, on average, from 10 to 13 per cent, with the poorest countries in Africa displaying the highest adaptation deficit. So, it’s important we act, and we act now.

Let me give an example. As part of the recovery package in Africa and other continents, there is a lot of investment in infrastructure. We want to make sure that these investments have climate risk embedded in their design and hence in their implementation and maintenance. We don’t want to build infrastructure anymore which will be destroyed when the next floods come.

For us, there is a very simple business case, over and above a moral argument, that investing in adaptation is good economics. We think that it is absolutely vital that, in the development of these new infrastructure projects or agriculture projects, that the climate lens is being applied consistently, and that is what we are planning to do in Africa long-term.

We are developing tools, guidelines, methodologies, and innovation programs for governments and development partners to do precisely that. You cannot develop properly without taking climate into consideration. There is this integrated approach that is not always applied, not only in Africa but also across the globe. That is what we are working on.

Since the start of this initiative, what would you consider as your main achievements on the continent? How did you overcome the initial challenges in order to get these positive results?

The urgency of the compounded COVID-19 and climate crises is compelling a new and expanded effort to accelerate momentum on Africa’s adaptation efforts.

At the GCA, we are joining forces with the African Development Bank to use their complementary expertise, resources and networks to develop and implement a new bold Africa Adaptation Acceleration Program (AAAP) to galvanize climate-resilient actions through a triple win approach to address COVID-19, climate change, and the economy.

The AAAP will contribute to closing Africa’s adaptation gap, support African countries to make a transformational shift in their development pathways by putting climate adaptation and resilience at the centre of their critical growth-oriented and inclusive policies, programs, and institutions.

As part of this program, just a couple of weeks ago, at the inaugural Climate Adaptation Summit, hosted by the Netherlands, we announced a new program to deploy billions of dollars to help young people in Africa build a new digitally-driven model of agriculture that can feed the continent’s people and boost prosperity even as the planet heats up.

The African Development Bank has already committed to putting half its climate finance towards the initiative – $12.5 billion between now and 2025.

The challenge now is to raise an equal amount from donor governments, the private sector and international climate funds. In the COVID-context this is challenging – our latest report “State and Trends in Adaptation” showed that investment in climate adaptation fell in 2020 even as more than 50 million people were affected by a record number of floods, droughts, wildfires and storms.

The pandemic is eroding recent progress in building climate resilience, leaving countries and communities more vulnerable to future shocks. I think awareness is really starting to increase that we can either delay climate action and pay for that choice or plan now and prosper. The returns in investing in building climate adaptation and resilience are much greater than the investment – investing $1.8 trillion globally in the next decade could generate $7.1 trillion in total net benefits.

We are also working to strengthen ecosystems that support youth-led climate adaptation entrepreneurship, and youth participation in adaptation policies; scale up climate adaptation innovations by strengthening business development services to 10,000 youth-owned enterprises and 10,000 youth with business ideas on jobs and adaptation; develop tailored skills and provide starting tool packs for one million youth to prepare them for climate-resilient jobs and entrepreneurial opportunities in adaptation and unlock $3 billion in credit for adaptation action by innovative youth-owned enterprises through innovative financial instruments.

With all these on the agenda, what role do African leaders have to play in terms of the global adaptation agenda?

With climate-related disasters expected to slow GDP per capita growth, African Governments are likely to experience increasing pressure on budgets and fiscal balances. Climate extremes are already leading to increased government expenditure, a reduction in the volume of collected taxes, ultimately resulting in an increase in government debt and impairment of investments. Adaptation and investment in climate resilience remain high development and investment priorities for Africa if the continent is to attain the SDGs.

In their Nationally Determined Contributions, African countries have already identified key areas where investments in adaptation and resilience building could yield high dividends. These include agriculture and forestry, water resources, disaster risk reduction, biodiversity and ecosystems, and human settlement. Many African countries are also in the process of preparing and finalizing their National Adaptation Plans.

Having said that, climate change is an all of social problem, no one can solve it alone. The role of African leaders is crucial to mobilise governments to boost climate action on both mitigation and adaptation. They need to improve their ability to incorporate climate risks into planning and financing major infrastructure, agriculture and other resilience-related investments.

With the youngest population in the world, Africa needs to find ways to unlock the power of its youth for adaptation – something we are very focused on at the GCA. Having said all of that, there are already a lot of good adaptation initiatives happening on the continent and many other countries in different regions are going to be able to learn from what Africa is doing.

Besides this, what specifically are the expectations from the leaders, looking at the fact that policies and approaches are different in African countries?

Earlier this year, we published a GCA policy brief, with the African Adaptation Initiative which recommended focusing stimulus investment in Africa on resilient infrastructure and food security to overcome the COVID-climate crisis. This was endorsed by 54 Heads of State and Government on the continent so when it comes to the need to accelerate adaptation action, it’s clear African countries are very much aligned. We are working hard on the ground to facilitate knowledge management and capacity building both within countries and between countries as well as promoting partnerships and co-operation at sub-regional and regional levels for increased synergy and scale. This cannot happen without the support of African leaders.

For example in Ghana, we are working to develop its first national-level assessment of the resilience of its infrastructure systems to climate change. By exploring and showcasing the potential co-benefits of nature-based solutions as part of a country-level package of investment in grey and green infrastructure, Ghana will function as a demonstration country of how to reduce costs and enhance ecosystems and we plan to roll out the initiative to other countries across the continent.

What platforms are there for discussing the GCA initiatives and programs for the African elite and the public? Do foreign organizations offer any support for these?

In January 2021, we hosted our first annual Ministerial Dialogue with over 50 ministers and leaders from international organizations including the newly appointed climate envoy John Kerry and Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva. The aim of this event is to help scale-up global leadership cooperation to accelerate climate adaptation.

Going forward, it will also serve as an annual high-level forum on climate change adaptation, acting as a lever for global leadership to drive a decade of transformation for a climate-resilient world by 2030. African leaders were very active in the dialogue and we look forward to hearing from them in our future sessions.

There are also other partnerships such as the Climate Commissions of the African Union and the African Climate Policy Center. The African Risk Capacity, a specialized agency of the African Union is making important progress enabling countries to manage climate risks and access rapid financing to respond to climate disasters. The African Union is leading the pan-African Great Green Wall initiative which involves many international organizations and foreign governments.

But climate adaptation will not be successful if it just comes from the top-down. The design of adaptation actions must include and be led by local communities who are best placed to understand needs. Solutions need to be context relevant and accompanied by soft support designed to enhance uptakes such as formal education initiatives, agricultural extension or behavioural change campaigns.

Do you suggest governments have to act now to accelerate issues that you have on the agenda for the next few years? What kind of support do you envisage from African governments?

Over half of Africa’s total population experiences food insecurity. The growing number of extreme climate events, from droughts and new crop diseases to floods and unpredictable growing seasons, continue to threaten Africa’s ability to feed itself.

There are increasing rainfall and malaria risks in East Africa, increasing water stress and decreasing agricultural growing periods North Africa, severe flood risks in coastal settlements in West Africa and increased food insecurity, malaria risks and water stress in Southern Africa. The effect of aggregated climate impacts could decrease the continent’s GDP by 30 per cent by 2050.

Suffice to say Africa really doesn’t a moment to lose and we need to accelerate climate adaptation now. In looking towards recovery from the pandemic, we have a unique opportunity to ensure that we all build forward better. It is our responsibility to ensure that the opportunity isn’t wasted and countries around the world must support Africa in this.

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The Future of Payments: Key Trends to Watch in 2025

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Luke Kyohere

By Luke Kyohere

The global payments landscape is undergoing a rapid transformation. New technologies coupled with the rising demand for seamless, secure, and efficient transactions has spurred on an exciting new era of innovation and growth. With 2025 fast approaching, here are important trends that will shape the future of payments:

1. The rise of real-time payments

Until recently, real-time payments have been used in Africa for cross-border mobile money payments, but less so for traditional payments. We are seeing companies like Mastercard investing in this area, as well as central banks in Africa putting focus on this. 

2. Cashless payments will increase

In 2025, we will see the continued acceleration of cashless payments across Africa. B2B payments in particular will also increase. Digital payments began between individuals but are now becoming commonplace for larger corporate transactions. 

3. Digital currency will hit mainstream

In the cryptocurrency space, we will see an increase in the use of stablecoins like United States Digital Currency (USDC) and Tether (USDT) which are linked to US dollars. These will come to replace traditional cryptocurrencies as their price point is more stable. This year, many countries will begin preparing for Central Bank Digital Currencies (CBDCs), government-backed digital currencies which use blockchain. 

The increased uptake of digital currencies reflects the maturity of distributed ledger technology and improved API availability. 

4. Increased government oversight

As adoption of digital currencies will increase, governments will also put more focus into monitoring these flows. In particular, this will centre on companies and banks rather than individuals. The goal of this will be to control and occasionally curb runaway foreign exchange (FX) rates.

5. Business leaders buy into AI technology

In 2025, we will see many business leaders buying into AI through respected providers relying on well-researched platforms and huge data sets. Most companies don’t have the budget to invest in their own research and development in AI, so many are now opting to ‘buy’ into the technology rather than ‘build’ it themselves. Moreover, many businesses are concerned about the risks associated with data ownership and accuracy so buying software is another way to avoid this risk. 

6. Continued AI Adoption in Payments

In payments, the proliferation of AI will continue to improve user experience and increase security.  To detect fraud, AI is used to track patterns and payment flows in real-time. If unusual activity is detected, the technology can be used to flag or even block payments which may be fraudulent. 

When it comes to user experience, we will also see AI being used to improve the interface design of payment platforms. The technology will also increasingly be used for translation for international payment platforms.

7. Rise of Super Apps

To get more from their platforms, mobile network operators are building comprehensive service platforms, integrating multiple payment experiences into a single app. This reflects the shift of many users moving from text-based services to mobile apps. Rather than offering a single service, super apps are packing many other services into a single app. For example, apps which may have previously been used primarily for lending, now have options for saving and paying bills. 

8. Business strategy shift

Recent major technological changes will force business leaders to focus on much shorter prediction and reaction cycles. Because the rate of change has been unprecedented in the past year, this will force decision-makers to adapt quickly, be decisive and nimble. 

As the payments space evolves,  businesses, banks, and governments must continually embrace innovation, collaboration, and prioritise customer needs. These efforts build a more inclusive, secure, and efficient payment system that supports local to global economic growth – enabling true financial inclusion across borders.

Luke Kyohere is the Group Chief Product and Innovation Officer at Onafriq

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Ghana’s Democratic Triumph: A Call to Action for Nigeria’s 2027 Elections

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ghana election 2024

In a heartfelt statement released today, the Conference of Nigeria Political Parties (CNPP) has extended its warmest congratulations to Ghana’s President-Elect, emphasizing the importance of learning from Ghana’s recent electoral success as Nigeria gears up for its 2027 general elections.

In a statement signed by its Deputy National Publicity Secretary, Comrade James Ezema, the CNPP highlighted the need for Nigeria to reclaim its status as a leader in democratic governance in Africa.

“The recent victory of Ghana’s President-Elect is a testament to the maturity and resilience of Ghana’s democracy,” the CNPP stated. “As we celebrate this achievement, we must reflect on the lessons that Nigeria can learn from our West African neighbour.”

The CNPP’s message underscored the significance of free, fair, and credible elections, a standard that Ghana has set and one that Nigeria has previously achieved under former President Goodluck Jonathan in 2015. “It is high time for Nigeria to reclaim its position as a beacon of democracy in Africa,” the CNPP asserted, calling for a renewed commitment to the electoral process.

Central to CNPP’s message is the insistence that “the will of the people must be supreme in Nigeria’s electoral processes.” The umbrella body of all registered political parties and political associations in Nigeria CNPP emphasized the necessity of an electoral system that genuinely reflects the wishes of the Nigerian populace. “We must strive to create an environment where elections are free from manipulation, violence, and intimidation,” the CNPP urged, calling on the Independent National Electoral Commission (INEC) to take decisive action to ensure the integrity of the electoral process.

The CNPP also expressed concern over premature declarations regarding the 2027 elections, stating, “It is disheartening to note that some individuals are already announcing that there is no vacancy in Aso Rock in 2027. This kind of statement not only undermines the democratic principles that our nation holds dear but also distracts from the pressing need for the current administration to earn the trust of the electorate.”

The CNPP viewed the upcoming elections as a pivotal moment for Nigeria. “The 2027 general elections present a unique opportunity for Nigeria to reclaim its position as a leader in democratic governance in Africa,” it remarked. The body called on all stakeholders — including the executive, legislature, judiciary, the Independent National Electoral Commission (INEC), and civil society organisations — to collaborate in ensuring that elections are transparent, credible, and reflective of the will of the Nigerian people.

As the most populous African country prepares for the 2027 elections, the CNPP urged all Nigerians to remain vigilant and committed to democratic principles. “We must work together to ensure that our elections are free from violence, intimidation, and manipulation,” the statement stated, reaffirming the CNPP’s commitment to promoting a peaceful and credible electoral process.

In conclusion, the CNPP congratulated the President-Elect of Ghana and the Ghanaian people on their remarkable achievements.

“We look forward to learning from their experience and working together to strengthen democracy in our region,” the CNPP concluded.

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The Need to Promote Equality, Equity and Fairness in Nigeria’s Proposed Tax Reforms

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tax reform recommendations

By Kenechukwu Aguolu

The proposed tax reform, involving four tax bills introduced by the Federal Government, has received significant criticism. Notably, it was rejected by the Governors’ Forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive. This article highlights the purposes of taxation, the qualities of a good tax system, and some of the implications of the proposed tax reforms.

One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.

A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.

In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.

The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.

The proposed tax reforms by the Federal Government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions should be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.

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