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,
agriculture, 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 place 40 years ago. 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. Instead the Grand Inga dam on the Congo River was hailed as a mega project that will change the economic landscape of Africa.
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.
