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COP27 updates
Afreximbank asserts Africa’s common position at COP27 (Afreximbank)
The hosting of the COP27 conference in Africa signifies a unique opportunity for the continent to assert its needs, challenges and outlooks, and most significantly to drive the African Position on just transition. Historically this conference, focused on climate change and its humanitarian ramifications, has marginalized Africa – whose contribution to humanity’s carbon footprint is minimal but whose people are suffering disproportionately from its effects. But with this year’s gathering of world leaders occurring in Egypt’s Sharm El Sheikh, it is vital that Africa’s authentic voice is heard – this is the overriding purpose of Afreximbank’s mission at COP27. By inserting and asserting our perspective in the global climate change debate, we want to promote a mainstream African position, as a key stakeholder region.
Africa’s situation, and therefore the position articulated by Afreximbank, diverges from those of many other regional blocs, particularly in the more prosperous Global North. This continent’s long-term sustainable development agenda, which relies on traditional energy sources, is impeded by the ongoing campaign towards zero-carbon emissions, and the short-term livelihoods of millions of Africans are imperiled by a headlong rush towards net-zero.
With this in mind, Afreximbank’s participation in COP27 revolves around three core elements: an accelerated implementation of the African Continental Free Trade Agreement AfCFTA, which can reduce the continent’s reliance on carbon-intensive imports; the fostering of partnerships to promote an energy transition model that is more globally inclusive; and the
The Board of Directors of the African Development Bank Group today approved an equity investment of $20 million in Evolution Fund III, a pan-African clean and sustainable energy private equity fund that is mobilising about $400 million into renewable energy and resource-efficiency assets across sub-Saharan Africa over a 10-year period. Inspired Evolution Investment Management is a well-established fund manager with more than 15 years of experience and a track record of deploying more than $310 million in renewable energy projects in African counties. The fund manager, through its predecessor funds, has delivered 21 renewable energy projects with a total generation capacity of 2 GW.
Oil and gas industry presence looms over U.N. COP27 climate talks (Grid)
International negotiators have gathered here for the annual United Nations climate conference known as COP27 amid nearly unprecedented turmoil and uncertainty. Following the upheaval of a pandemic, Russia’s invasion of Ukraine has thrown global energy markets into chaos, and the dramatic ambition needed to meet the global climate change challenge was at best on shaky ground. Even still, the talks playing host to a fossil fuel revival was likely not on anyone’s bingo card.
“This should not be a fossil fuel trade show,” David Tong, the global industry campaign manager at nonprofit Oil Change International, told Grid on Monday.
Negotiations toward a new global climate agreement continue this week, focused in theory on making bigger cuts and on securing massive amounts of funding for developing countries to address the impacts of warming, but the presence of the fossil fuel industry has been inescapable. The industry has increased its lobbying presence, there are whispers that the eventual diplomatic agreements will fail to even mention coal and oil and gas, and reports proliferate on the energy sources’ continued global expansion.
Gas utilities look to hydrogen, renewables integration while facing ‘existential threat’ of decarbonization (Utility Dive)
Gas utilities face a dilemma as they try to balance affordability relative to electric alternatives with the need to decarbonize, said Moody’s. Their long-term advantage, however, may be the sheer volume of energy delivered. “LDCs can reduce emissions in a number of different ways, many of which would incur additional costs that would be borne by end users,” Moody’s said. That could lead to additional scrutiny from regulators and make them less competitive with electric alternatives. However, LDCs have a “key strategic advantage,” said Moody’s. They can “reliably deliver a significant amount of energy on demand that may be extraordinarily expensive to replace.” “This creates a substantial barrier to replacing them, although this may vary materially by region,” the ratings agency said.
Decarbonising international shipping: At COP 27, European Commission provides additional €10 million (European Commission)
In the margins of COP27, the European Commission today announced an additional €10 million for a project to reduce international shipping’s greenhouse gas (GHG) emissions.
The projects involved port energy-efficiency assessments, equipping port vessels with solar power, and establishing data collection systems for ship GHG emissions.This project is part of the EU Global Gateway strategy, Europe’s offer for connecting the world through sustainable investments and reliable partnerships, boosting smart, clean, and secure links in the world, including in the transport sector, for instance with the external dimension of the EU Sustainable and smart mobility strategy.
The new funding makes possible a second phase of the project, focusing on portside energy efficiency measures.
Countries pledge added support to GEF funds for urgent climate adaptation (Global Environment Facility)
In an important injection of support to countries facing the worst effects of climate change, eight donor governments pledged new funding for the Least Developed Countries Fund (LDCF) and Special Climate Change Fund (SCCF) during the COP27 climate summit and several others backed the funds’ ambitious goals for meeting the most urgent adaptation needs. Announcing a total of $105.6 million in new funding, Denmark, Finland, Germany, Ireland, Slovenia, Sweden, Switzerland, and the Walloon Region of Belgium, stressed the need for even more support for the Global Environment Facility funds targeting the immediate climate adaptation needs of low-lying and low-income states.
Additionally, countries including Belgium, Canada, France, and the United States, as well the European Commission, signaled political support for the two funds, and some expressed an intention to contribute further in the coming months. Several welcomed the SCCF’s dedicated focus on Small Island Developing States as a key avenue of climate finance that is otherwise lacking.
Brazil, China, India & South Africa issue jointly call at COP27 climate summit (Engineering News)
COP27: Global North governments want private sector to pay for loss and damage (Down to Earth Magazine)
Private sector companies’ understanding of climate adaptation and mitigation is limited, according to experts The developed countries, mainly the European Union and the United States, do not seem to be very keen on an outcome on a loss and damage facility at the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC) in Sharm El-Sheikh.
They appear to be pushing for private finance outside the UNFCCC process. The prevailing sense from the governing body of the European continent seems to be focusing on resolving domestic energy security in the context of the war in Ukraine.
World Bank Announces New Blue Economy Financing Program for African Countries (World Bank)
Today, the World Bank announced a new Blue Economy program that will catalyze financing and provide an operational response to development challenges in coastal-marine areas of the African continent. The Blue Economy for Resilient Africa Program (BE4RAP), was announced at a COP 27 World Bank event, attended by Egypt’s Environment Minister Yasmine Fouad, Tanzania’s Deputy Minister for Union and Environment Hamza Khamis Hamza, and Morocco’s Deputy Budget Director for the Ministry of Economy and Finance Youssef Farhat. The program seeks to respond to the challenge coastal countries face to manage their coastal and marine resources to spur economic growth and reduce poverty, while adapting to the effects of climate change.
Developed nations backtracking on climate change mitigation commitments (SAnews)
The Ministers of Brazil, South Africa, India and China have expressed concern that there has been a significant increase in the consumption and production of fossil fuels in the past year by developed countries, even as they continue to press developing countries to move away from the same resources. “Such double standards are incompatible with climate equity and justice,” the Ministerial Joint Statement by the Ministers of Brazil, South Africa, India and China representing the BASIC Group said on Tuesday.
“BASIC countries are gravely concerned that developed countries are still not showing leadership or responding with a matching progression of effort. There has been backtracking on finance and mitigation commitments and pledges by developed countries,” the BASIC Ministerial Group said. Developing countries require predictable and appropriate support, including climate finance at the necessary scope, scale and speed and access to technology and markets to ensure and enable their sustainable development.
“In this regard, the Ministers underscored the urgent need for a fundamental transformation and modernisation of the global financial architecture, including a systematic reform of the multilateral development banks to make them fit-for-purpose in supporting sustainable development and just and equitable transitions.
How blended finance can support climate transition in emerging and developing economies (IMF Blog)
Local news
Key Data Suggests South Africa’s Economy Has Averted a Technical Recession (Bloomberg)
South Africa’s economy is likely to have averted a technical recession in the third quarter despite record power outages, key data indicates. Better-than-expected mining and manufacturing output is set to outweigh relatively soft retail sales data, suggesting Africa’s most industrialized economy returned to growth in the third quarter after contracting 0.7% in the prior three-month period. Mining and manufacturing make up about a fifth of total gross domestic product, while trade, which includes the retail sector, accounts for 13%.
Uganda seeks Kenya partnership in deal to boost tourist numbers (The East African)
Uganda’s tourism players are reaching out to Kenya in a controversial bid to help bridge market access challenges for Kampala’s hospitality offers. The players in Kampala see Kenya’s coastal exposure to the world as a starting point where tourists arriving in Kenya can go on to visit Uganda on the same visa while using Uganda Airlines as a connecting carrier. But that could bring new threats to Kenya’s own local sites, as well as affect market share for Kenya Airways, which has for years dominated the Kenya-Uganda route.
But if this plan works, the proponents argue, Kenya and Uganda will mutually benefit, with Uganda profiting from Kenya’s networks to attract visitors. Kenya in the meanwhile will have its tourists visit Ugandan sites at a discounted price, which stakeholders say could break monotony for repeat clients who have explored Kenya.
Horticulture exporters urged to scale up production (Graphic Online)
Horticulture exporters have been challenged to take advantage of the looming shortage of fruits and vegetables in Europe as a result of the raging Russia-Ukraine war to maximise their gains. The Country Manager of the multi-national airport handling company, Swissport, Chris Goodsir, who made the call, explained that the war was creating an energy shortage in Europe resulting in greenhouses used for growing fruit and vegetables reducing their hours of operation. “This has resulted in a shortage of fruit and vegetables in Europe and this means that exporters of these crops in West Africa have an opportunity to sell higher volumes of exports to Europe but at higher prices, too,” he said.
Nigeria plans 3318km of rail as stakeholders seek connectivity across Africa (The Guardian Nigeria)
Federal Government, in Abuja, yesterday, said about 3,318 kilometers of rail lines are being considered across the country. This came as stakeholders insisted that unless Africa is linked by railway network, projected boost in intra-African trade, as envisaged under the African Continental Free Trade Area (AfCTA), would remained a mirage. Speaking at an International Railway Conference, organised by the Abuja Chamber of Commerce and Industry (ACCI), the stakeholders, noted that the continent must prioritise railway, if it must address growing poverty, unemployment and weak economic outlook.
Minister for Transportation, Mu’azu Sambo, said the Federal Government has conducted feasibility studies on selected route alignments it considered viable for development.
Djibouti Economy Slows Due to Global Crises, Severe Drought (World Bank)
After rebounding in 2021, Djibouti’s economy has slowed since the beginning of 2022 due to the war in Ukraine, global inflation, severe drought, and subdued Ethiopian demand. Yet growth is expected to recover to 5.3% in 2023 and 6.2% in 2024, and opening up the digital sector for competition could lead to an additional 1% increase in national GDP by 2025, according to the latest edition of the World Bank’s Djibouti Economic Monitor. The twice-yearly report analyzes development trends and constraints in Djibouti. The autumn 2022 report, titled “Towards Sustainable Growth: Improving Fiscal Stability and Competitiveness of the Digital Sector,” estimates real GDP growth at 3.6% for the whole of 2022, down from 4.3% in 2021.
But in the current year, soaring global oil and food prices have pushed up inflation. “Urgent action is needed for the Djibouti economy to recover over the coming two years. This includes expediting structural reforms, fiscal consolidation, and implementing the private and public investment programs,” said Boubacar-Sid Barry, World Bank Resident Representative in Djibouti.
African trade and integration
The United Nations Economic Commission for Africa (ECA) holds a 3-day Validation and Closure of Phase II of the AfCFTA-anchored Pharmaceutical Initiative & Discussion of the Action Plan for Phase III meeting in Nairobi, Kenya from 19 to 21 October 2022. The event brought together senior government officials from Comoros, Djibouti, Kenya, Ethiopia, Madagascar, Rwanda, Seychelles, and Sudan as well as representatives of UNECA, UNICEF, AUC, AUDA-NEPAD, Africa CDC, EAC, USP and pharmaceutical specialists.
African Development Bank predicts economic slowdown in East Africa in 2022, but bounce back in 2023 (AfDB)
The African Development Bank has released its latest East African Economic Outlook, predicting a slow recovery in the region in 2022 at 4.0 percent against 5.1% in 2021. The slowdown is due to the lingering effects of COVID-19; the adverse impacts of geopolitical tensions (notably the Russia-Ukraine conflict); climate change and devastating locust invasion, together with regional conflicts and tensions. The report notes that because of these obstacles, countries in the region have experienced heightened inflationary pressures, particularly on food and fuel, leading to rising cost of living. This has resulted in weakening national currencies, floods and drought, contraction in agricultural production; depressed business activity, and falling revenue collection, among others.
However, the continued reopening of economies globally could mitigate these adverse effects in 2023 with a projected growth rate of 4.7%, repositioning East Africa as the top-performer in growth among the regions of the continent, according to the report. The report, themed “Supporting Climate Resilience and a Just Energy Transition”, was launched on 28 October 2022.
Why EAC needs to enhance investments in agriculture (The Citizen)
The East African Community (EAC) must invest heavily in agriculture to cater to the growing demand for farm products. Besides rising demand for food due to the vagaries of the weather, 70 percent of the region’s industries are agro-based. This was emphasized last week during a high-level forum of business leaders and policymakers in the region held virtually.
The partner states were urged to review their agricultural development strategies in order to attract more investments. The East African Business Council (EABC) chief executive officer, John Kalisa, said the sector saved the region from recession during the height of Covid-19.
The agricultural sector in the EAC accounts for between 25 and 40 percent of the region’s GDP and employs over 80 percent of the population. However, Mr Kalisa said the sector was not attracting much investment to match its critical role in the economy and food security. The EAC countries were also urged to ensure their agricultural development programmes were compliant with CAADP principles and commitments. In particular, the EAC partner states should enhance investment financing in agriculture “to boost food production, supply, and trade.”
Experts Review Proposals of Strengthening Regional ICT Associations (COMESA)
A technical working group under the Enhancement of Governance and Enabling Environment in Information and Communication Technology (EGEE-ICTs) programme is meeting in Kigali, Rwanda for a two-day validation workshop to review a study from a consultant on how they could provide assistance to the Regional ICT sector Associations. The experts from COMESA, SADC, EAC, IGAD and IOC have been joined by representatives from Regional ICT Associations (RICTAS) to review recommendations on the development of institutional strategies and business/membership models that would sustain their role of ensuring coordinated public and private sector policy and regulatory engagement and development.
Funded by the European Union Development Fund (EDF11), the EGEE-ICT aims at supporting the effective review and or development of various regional policy and regulatory frameworks in a harmonized manner that will contribute to enhancing competition, improved access to cost effective and secure ICT services in the East African-Southern Africa and Indian Ocean region.
African ports urged to adopt smart technology to drive efficiency (Businessday)
African ports can benefit enormously from digital transformation by adopting smart systems to keep the supply chains moving smoothly, Huawei, one of the leading global providers of information and communications technology (ICT) infrastructure and smart devices, has said. According to the firm, the digitisation of Africa’s ports will be a logical solution to meet the increasing demand for freight transport volumes. This, the company said, will also enhance Africa’s trade efficiency, and investment attraction, and bring about huge economic and social development.
“Ports are where cargo begins and ends its journey,” Jiang Kaimin, senior marketing expert at Huawei’s customs and port business, said.
Alliance to accelerate financing for green infrastructure launched (ESI Africa)
The African Union, the African Development Bank and Africa50 together with several global partners launched a multi-billion alliance for green infrastructure. The Alliance for Green Infrastructure in Africa (AGIA), an initiative to help scale and accelerate financing for green infrastructure projects in Africa.
The Alliance’s mission is to raise significant capital to accelerate Africa’s just and equitable transition to Net Zero emissions. It has two strategic objectives. The first is to generate a robust pipeline of transformational bankable projects. The second is to catalyse financing at scale and speed for Africa’s infrastructure.
The Alliance for Green Infrastructure in Africa will raise up to $500 million to provide early-stage project development capital. This is capital that will build a robust pipeline of bankable projects, starting with pre-feasibility stage all the way through to commercial and financial close. This is projected to generate up to $10 billion worth of investments in green infrastructure.
Global economy
G-20 leaders issue declaration to tackle pandemic recovery challenges worsened by Ukraine war (The Straits Times)
Leaders of the G-20 major economies on Wednesday adopted a declaration that seeks to address various challenges posed by the Covid-19 pandemic and exacerbated by Russia’s war in Ukraine, and pledged necessary support to the world’s most vulnerable countries.
Underlining the adverse impact the war had on the global food chain, the leaders supported the Black Sea Grain Initiative, an initiative to transport grain and food produce from Ukrainian ports, as well as a Russia and United Nations Secretariat agreement to ease the movement of food and fertilisers from both countries to the global market, and address supply issues and prevent food insecurity and hunger in developing countries.
DG Okonjo-Iweala to G20 leaders: “We need to strengthen trade cooperation, not weaken it” (WTO)
“An open rule-based world trading system is the foundation of our global economy,” the Director-General told the G20 leaders at the opening of the summit. “It has delivered unprecedented growth and development. It has enabled us to withstand the COVID-19 pandemic. And it will be key to achieving the ambitious goals you have set solving food and energy shortages, tackling climate change, financing development and getting the (UN Sustainable Development Goals) back on track.” “Fragmenting this foundation would put these goals in jeopardy, worsening domestic prospects and geopolitical tension,” she added. “It would result in substantial global GDP losses, which could be double digit losses for developing countries.”
G20 Summit: Kagame Rallies Developed Countries To Back Recovery Efforts Of Developing Ones (KT Press)
With the Covid-19 effects still biting and the impact of the Russia-Ukraine conflict pushing countries into inflation, President Paul Kagame has called on development nations to step in the gap and help address fiscal pressures. While addressing separate sessions on food and energy security on the global health architecture, digital transformations, and sustainable energy transitions, President Kagame said developed nations have what it takes to cushion developing nations from the shocks that are still ongoing.
G20 leaders pitch for updating global agricultural food trade rules (PTI)
G20 Bali Leaders’ Declaration (The White House)
Global Economic Turmoil Calls for a Modernized Global Financial Architecture to Address Needs of the Most Vulnerable Countries (Carnegie Endowment for International Peace)
In October, the International Monetary Fund (IMF) published what is perhaps its most bleak economic outlook in a decade, forecasting that the world economy will grow by only 2.7 percent in 2023 and warning that “the worst is yet to come.” Not since the global financial crisis of 2007–2008 have we seen such pressure on vulnerable countries grappling with what Carnegie scholar Adam Tooze describes as “polycrisis.” Climate change, food and energy price inflation, debt distress, and an ongoing pandemic have created a dynamic where, in Tooze’s view, “the whole is even more dangerous than the sum of the parts.” This constellation of crises demands that G20 leaders design a new global financial architecture that delivers urgent liquidity for vulnerable countries, a solution for countries facing debt distress, and long-term financing at an order of magnitude greater than currently available—all while giving those vulnerable countries a more meaningful voice in the design of that architecture.
This polycrisis comes to its most acute head within the twenty-five countries that, according to Bloomberg, are most vulnerable to debt distress.
Trade for Peace Week looks at fragile and conflict-affected states’ WTO integration (AU)
Under the theme “Fragility and Conflict: Building Peace through Trade and Economic Integration”, the event was opened by WTO Deputy Director-General Anabel González. In her opening remarks, she underlined the importance of the topic, which has been gaining traction in recent years, especially given the poly-crisis that has exposed multilayers of fragility around the world.
Noting that for several decades the multilateral trading system has provided an enabling environment for promoting peace through economic integration and growth, DDG González stressed: “Trade has the potential to address fragility and conflict in a number of different ways, including by reducing vulnerabilities to external and internal shocks, strengthening ties between states to reduce the likelihood of conflict, and giving populations opportunities for economic development.”
