BRITAIN’S ROLE IN UNLOCKING AFRICA’S GREEN ECONOMY

'Business-as-usual has started to look like the end of the world' - Lester R. Brown, President of Earth Policy Institute

Summary

UK prime minister David Cameron, as president of the G8 this year and host at the group’s Summit in June, has an historic opportunity to put the green economy into Africa's growth story by instigating a green investment stimulus through aid. This would have a multi-win effect: it would reinforce the green foundations Africans have been constructing over the past 20 years; it would prevent Africa's green growth potential from being hi-jacked by business-as-usual (or the 'brown’ economy); it would generate massive green growth that could help rebalance the global economy, and it could return Britain to a position of influence on this last frontier. Mr Cameron has a number of advantages for stimulating green growth in Africa and for working with Africans to create sustainable and resilient green economies from which the rest of the world can benefit and learn. 

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In mid-June, UK prime minister David Cameron, as president of the G8 this year, will be hosting the group’s annual Summit in Northern Ireland. The opportunity for Britain to influence global events in such a context happens only once every eight years. At the 2005 Gleneagles G8 Summit, one of Tony Blair’s notable achievements was debt relief for the world’s poorest countries. This had a particularly positive effect on heavily-indebted Africa and acted as a huge economic stimulus for the continent.

This stimulus, combined with China’s big push into Africa, better governance and prudent macro-economic policies created the conditions for the continent’s economic take-off during the biggest global boom in history. By 2008, just before the financial crash, Africa was seen as the last frontier for investment. Having rebounded from the crisis and currently enjoying some of the highest growth rates in the world, Africa is now seen as the new engine of global growth. The recent surge in 'Afro-optimism' has developed into 'Afro-euphoria'. According to The Economist, ‘global investors are salivating’ at the prospects. 

However, as British colonials used to say, ‘In Africa things are not always as they seem’. This is Africa’s third era of hope. The first was at independence, the second at the end of the Cold War. Yet while this time is certainly different, unfortunately so much is still the same. Business-as-usual, or the existing brown economy, which is high carbon, resource intensive, environmentally degrading and socially divisive is still the most powerful force on the continent. Having failed Africa so dramatically in the past it is now expanding faster than ever. China, India and other new investors in the world’s most challenging continent do not seem to have learned from Europe’s past mistakes. The ‘Wisdom of the East’ is in short supply in Africa today.

China alone is changing the face of Africa at an unprecedented rate. But the ‘China Model’ in Africa, which is based on large-scale public infrastructure projects, while boosting short-term growth, is a system dating from the 1980s and is subject to the same hidden costs as 30 years ago. Only this time investments are on mega scales with mega hidden costs to match. If the China model in China, as the country’s former leaders often reminded us, is unbalanced, uncoordinated and unsustainable’, these costs in Africa’s harsh, complex and unpredictable conditions could be greatly magnified. Despite two decades of progress on green development in Africa and the emergence of a green economy as the only viable route towards resilience and sustainability, Africa’s green growth potential is in danger of being submerged by 20^th century business-as-usual. Long-term growth prospects remain uncertain.

Africans began their green journey 20 years ago after the failure of the post-colonial development model which, like the China Model today, ignored local knowledge, lacked most forms of risk management and was based on ‘one-size-fits-all’ . For the past five years African leaders have been calling for green investments adapted to local conditions. African leaders in their Consensus Statement to the UN’s Rio+20 ‘Earth Summit’ in June 2012 made it clear that the green economy is their only long-term hope. The good news is that Africa’s lack of development makes it easier to build new economic systems that the world urgently needs. In Africa the conditions for fresh thinking are ideal and the time is ripe for a quantum leap forward. Yet very few people seem to be listening to Africa’s green voices.

There are a number of campaigns urging Mr Cameron to focus attention on Africa at this year’s G8 Summit, as Tony Blair did in 2005 when the main campaign was Make Poverty History. But as in 2005, today’s campaigns - including the high-profile IF and ONE - while focussing on critical and urgent issues such as poverty, aid, land, food, tax and transparency, do not address the underlying systemic problems. For at the heart of Africa’s uncertainties is the unsustainable brown economy which Britain, more than any other country, introduced to Africa and which Britain today is well-positioned to address.

Mr Cameron, as Britain’s Prime Minister and President of the G8 this year, has a number of advantages for stimulating green growth in Africa and for working with Africans to create sustainable and resilient green economies from which the rest of the world can benefit and learn.

1. As the aid-versus-trade debate rages unabated, Britain, as the most committed of the G8 countries to maintaining aid levels, is well-qualified to propose a new approach to aid in Africa. For instance, a G8 green aid package for Africa based on environmental, social and governance (ESG) criteria would stimulate Africa’s current efforts to generate green growth. Such a green aid stimulus at this pivotal moment in the continent’s development would reinforce the green foundations Africa has been building for the past 20 years while at the same time steer investments away from business-as-usual onto more sustainable paths.

2. Mr Cameron is one of three co-chairs of a High Level Panel appointed by the UN secretary-general to oversee the establishment of the Sustainable Development Goals (SDGs) to replace the MDGs when they expire in 2015. As SDGs would be clearly incompatible with the current unsustainable economic system and for that reason ‘promise to provide the foundation for a global green economy’, this is an historic opportunity for Britain to have significant influence over the post-2015 framework and the resulting green economy, its definition, development and growth.

3. If to plan for the future we must understand the past, Britain’s unrivalled knowledge of Africa amassed over the past 200 years, from the 19^th century travellers to 21^st century green development researchers, is invaluable. As knowledge is one of the building blocks of the green economy, Britain is in a unique position to combine past and present knowledge with future aspirations in Africa, and  to work with Africans to generate sufficient green growth that could play a pivotal role in the ‘great rebalancing’ of the global economy.

4. Britain’s institutions working in Africa are arguably the most experienced on the continent and are well qualified to work with Africans on the urgent reforms required to cope with the challenges of the 21^st century. British businesses are also among the most innovative in exploring new ways towards sustainability. Britain has also developed appropriate technologies as well as the organisational and management tools to accelerate the expansion of Africa’s green economies.

5. As English is the global language and therefore will be the language of the green economy, Britain has a distinct advantage in exploring this new territory and in disseminating knowledge. British writers are excelling in the challenging task of furthering our understanding of this complex and controversial subject. A glance at the Financial Times Special Reports on sustainability and the environment over the past five years, for instance, clearly demonstrates how Britain’s journalists are explaining how the green economy might work and how it might work in Africa.

6. If London is the financial capital of the world it is also the world’s ‘brownest’ city. London was built from the profits of sugar whose major hidden cost was the enslavement of millions of Africans. Britain’s industrial revolution, with London at its centre, was driven by high-carbon coal. Resource extraction from Africa during and after the colonial period made London greater still, with Africa again paying the hidden costs. Most of the wealth of the City of London is in hydrocarbons whose main externality is climate change where Africa is paying the highest price. But as the world transitions to a low-carbon economy, London has huge financial advantages to accelerate this necessary process. If all cities must eventually become green to survive, London’s financial might, if handled responsibly, can put it ahead of the curve.  

7. On 7 May 2013, Mr Cameron co-chaired the Somali Conference in London with Somali President Hassan Sheikh Mohamud. The progress made at this and previous Somali Conferences in London is giving Britain a leading diplomatic role in what is currently Africa's most challenging country. This work as political mediator and peace builder could return Britain to a position of major influence and a force for good in Africa as well as opening opportunities for new trade. Such constructive influence, translating into green growth plans around the continent, could act as a healthy counter-balance to the rapidly expanding business-as-usual, or brown economy, in Africa. President Hassan has called on the international community for a ‘Marshall Plan’ to rebuild Somalia, destroyed by 22 years of war. By combining Britain's historic and current knowledge of the country, Mr Cameron is now in a position to approach Somalia as a clean slate on which to write a new African story, and to design a Marshall Plan that is green.

On taking office, Mr Cameron pledged that his government will be ‘the greenest ever’. Putting the green economy into Africa’s growth story by instigating a G8 green aid stimulus for Africa would create a multi-win situation and be a contribution of global significance. It would stimulate the true economic transformation of Africa where production, consumption, finance and trade are radically restructured and reformed to meet the urgent challenges of exploding populations, inequality, unemployment, ecological degradation, biodiversity loss and climate change, all of which threaten Africa’s future.

In 2005, when Britain last hosted the G8, the world was a radically different place. Then, the rich world on its biggest spending spree in history relieved Africa of its debts. Today, five years after the bubble burst, Africa is rising and the rich world is drowning in debt. Some sort of Green New Deal with Africa, beginning with a green aid stimulus, would not only prevent the brown bubble reappearing on this final frontier, but would also create sustainable and resilient global green growth that could balance the books for future generations. 

In 2013 Africa celebrates 50 years since the founding of the Organisation of African Unity, which became the African Union in 2002. During the past five decades the former colonisers and their allies have been calling on Africa for responsible leadership. This is now happening, but for it to become entrenched Africa needs responsible leadership from its partners. Britain, which has demonstrated its share of irresponsibility towards Africa in the past and has grown wealthy in the process, is now in a position to turn things around. Britain’s focus on ESG issues in Africa over the past 20 years has proved how much can be achieved and has created green foundations for the work ahead.

Meles Zenawi, late prime minister of Ethiopia, who played a major role in the 2005 debt relief negotiations, was also one of Africa’s great, green visionaries. Acutely aware of the enormous challenges facing not only Ethiopia but the whole of Africa he said: ‘Our struggle is not a marathon but more akin to a relay race where those who ran earlier pass on the baton to those who came later.’

Holding the Presidency of the G8 this year, Mr Cameron has an historic opportunity to take up the baton and use Britain’s unique connections, knowledge, expertise, technologies and influence to help build a green economy on the world’s last frontier that will ultimately benefit us all. The prime minister's greatest advantage is that Africa's green pioneers have already started the process. If ever there was a moment for Pliny the Elder’s observation to be proved correct this is it: Ex Africa semper aliquid novi - Out of Africa, always something new.