AFRICA: FIRST GREEN FRONTIER (OR LAST BROWN)

This is the time to scale-up progress to achieve a uniquely African Green Revolution. So much is at stake, and the time is ripe.
Kofi Anan, former United Nations Secretary General - 2010

Overview 

Africa is the last frontier for investment and could be a new ‘green’ growth engine that can play a pivotal role in rebalancing the global economy. Africa is still extremely vulnerable to an increasing number of outside and inside shocks including the ‘brown’ economy which is expanding fast across the continent. Africa is in danger of becoming the last frontier for the brown investment instead of the first frontier for green. If Africa is a ‘green field’ for investment it is in everybody’s long-term interest to keep the field green. This is Africa’s greatest challenge.

From 20-22 June 2012 the world will meet in Brazil for the United Nations Rio+20 Conference on Sustainable Development. This first ‘Earth Summit’ of the 21st century will assess progress made in the past 20 years and focus on two themes for the future: (a) a green economy in the context of sustainable development and poverty eradication; and (b) the institutional framework for sustainable development. 

During the Conference it is hoped that the international community will agree on a set of Sustainable Development Goals; appoint a global ‘high commissioner’ for the environment, and elevate the United Nations Environment Program to Organisation status equal to WTO or WHO.

This once-in-a-generation event takes place against a backdrop of mounting global economic, financial, environmental and social crises. The single issue which will decide the outcome of the Summit is forging a global consensus on the green economy and how to generate its growth. Without the rapid and sustained expansion of the evolving and sustainable green economy as a counterbalance to the dominant and unsustainable brown economy all other growth will be short-lived.

The historic Summit also coincides with the rise of Africa as the last frontier for investment and the new engine of global growth. After 50 years of independence the world’s largest store of untapped of resources – mineral, ecological and human - is opening up and ready for business. For the first time Africa's resources are becoming accessible to the rest of the world and the world’s products are becoming accessible to Africa.

In the past four years since the beginning of the current crisis a record number of conferences, meetings, reports, papers, articles, speeches, interviews and films confirm Africa's enhanced position in global affairs.  The recent success and inspiration of the May 2012 World Economic Forum on Africa in is springboard to the world stage. The Rio+20 Summit could be the next. So great is the continent's growth potential some say this will be an African century.

However, this is Africa's third era of hope and it arrives at a time of great uncertainty. Although "this time is different" unfortunately so much in Africa and worldwide are still the same. Huge imbalances remain and many are getting worse.  How Africa continues its rise and manages its resources in such uncertain times will have a major influence on the future of the global green economy and the course of the 21st century. The hidden costs of our current brown economic development model are causing rapidly diminishing returns. Those costs in Africa's complex, unpredictable and often hostile conditions are higher and appear earlier than anywhere else. 

1. Global economic volatility. Despite the 2010 rebound from the Great Recession, the impressive growth forecasts and current macro-economic stability, Africa is a long way from economic independence and remains the continent most vulnerable to global economic volatility. In the event of a prolonged downturn the continent could face the threat of multiple failed states just at it did in early 2009 in the depths of the financial crisis. After the 2005 debt relief, Africa's debts  are rising again, in some countries to unsustainable levels. Rapid and sustained growth in Africa is essential. As African leaders often remind us: "We have to run just to stand still." Poor development decisions, misallocation of funds and non-performing billion dollar loans in a rapidly slowing global economy could set Africa back once more. 

2. Climate change. Although Africa has huge agricultural and hydrological potential, climate change is having a disproportionate impact on output and is set to get worse. Food production could halve by 2030 while populations in places could double. Rampant deforestation, spreading desertification and increased floods could make vast areas uninhabitable. For Africa to meet these challenges nothing short of multi-revolutions are urgently needed in planning, technology, economics, finance, hydrology, agriculture, biomass production and human aspiration. The consequences of Africa's failure to adapt to the conditions ahead are unthinkable.

3. Demographics. Africa's greatest sustainable resource is its youthful populations which are set expand  over the coming decades. In 30 years' time, in a much older world, Africa's youth will play a major role in global productivity. Now is the time to work with them to prepare for such a responsibility. However, Africa's current youth unemployment in places is reaching emergency proportions. Unless millions of sustainable jobs are created over the next decade Africa's tremendous demographic dividend could turn into a demographic time-bomb that will impact on the rest of the world..

4. Capital flight. Given the above it is not surprising that Africa has the greatest capital flight of any other region. For all the billions of dollars of pouring into Africa billions more are pouring out. This imbalance makes Africa a net creditor to the rest of the world. Unless more sustainable economic development models are created to level the playing field and give people trust, those with money will continue to take it out to safer places eventually bleeding the continent to death.

5. Business-as-usual or the brown economy. Although 'this time is different' in Africa much of the current boom is still high-carbon, resource-intensive, environmentally degrading and socially divisive - a brown economy. Since 2003, the big push by the emerging economies, led by China, while bringing much-needed investment is not bringing enough emerging ideas. The planning, technology, economics, assumptions and even some of the attitudes of the 'China model' in Africa are little different to those of the post-colonial model only now investments are on mega-scales with equally mega hidden costs and risks. If the China model in China, as premier Wen Jiabao often says,  has produced an economy which is "unbalanced, uncoordinated and unsustainable" these costs in Africa could be greatly and rapidly magnified.  China is the game changer in Africa but so far the 'Wisdom of the East' is not on great display.  

If Africa is to fulfil its ambitions and become a sustainable engine for global growth, with the potential to add an estimated $3 trillion to the global economy over the next decade, it is in everyone’s long-term interest that as much of this wealth as possible goes into the green economy rather than the brown. Instead of becoming the last frontier for brown investment, which could easily happen, Africa can become the first frontier for green. The continent's historic lack of brown development is now its greatest advantage. The 'greatest imbalance on earth' can now play a pivotal role in the 'great rebalancing.'

Ethiopia’s prime minister, Meles Zenawi, describes Africa as a ‘green field for investment because it is the least-developed region on earth’. The challenge is to keep the green field green. Africa’s voice at Rio is therefore critical. There is so much at stake.