How can Africa salvage the Sustainable Development Goals?

Picture a town in the Sahel region and a young woman named Sara. Despite hailing from a marginalised rural community, Sara had the opportunity to become the first in her family to complete high school and subsequently earn a bachelor’s degree, made possible through government subsidy programmes.

Upon completing her studies, Sara quickly secured a position as a human resources officer in a local medium-sized company specialised in meat processing.

Several years prior to this, a large solar park had been installed near the town where Sara resides. The solar energy from the park now powers the village of Sara’s upbringing, marking a historic milestone as the community has access to electricity for the very first time.

The solar park boasts a remarkable ability to store power, made possible by batteries manufactured in Southern Africa using critical minerals from Eastern Africa.

Products travel across borders with ease, all thanks to a continental free trade area. As a result, power outages are now a thing of the past and it is possible to effectively maintain cold chains.

Departing from the practice of exporting live cattle, Sara’s town has transformed into a vibrant hub for meat processing. This transformation has played a pivotal role in the founding of the company Sara is part of.

The visible impact of these changes is evident and encompasses not only Sara’s life but also that of many others. Poverty rates have dropped, most children complete high school, and the region has become notably safer.

The narrative above paints a vivid picture of a possible future where the UN Sustainable Development Goals (SDGs) have been achieved. It illustrates the possibilities within reach if we do things right.

In 2015, all members of the United Nations signed up to the SDGs. These are a comprehensive set of global goals to end poverty, protect our planet, and improve the living conditions of the global population. The ambition was for countries to use the goals as a benchmark for development and aim to achieve all or most of them by 2030. 

2023 marks the halfway point to the deadline set for accomplishing the SDGs. Aggravated by the Covid-19 pandemic and other recent crises, both the world and Africa, in particular, are unfortunately far off-track in achieving the goals; 695m people in Africa are either poor or face the risk of falling into poverty. This represents 50% of the continent’s population.

The urgent need for action to rescue the SDGs is evident. Thankfully, the situation is far from being as hopeless as it is often perceived. Embracing the interconnected nature of the SDGs can unleash an immense transformational potential.

When approached with the right perspective, there is no contradiction between eradicating poverty and taking effective climate action. Rescuing the SDGs is contingent on adopting integrated SDG acceleration pathways. Encouragingly, Africa is well positioned to do so. The continent is a solutions powerhouse for rescuing the SDGs and saving the climate. The Nairobi Declaration from the recent Climate Summit encapsulates this repositioning of Africa’s role in the global climate change processes, in developing new solutions and in mobilising the necessary finance and investment.

Africa has 60% of the world’s uncultivated arable land, 40% of the world’s solar irradiation potential, 71% of global cobalt production, and 77% of platinum. Cobalt and platinum are both critical minerals for the energy transition and the electrification of transport systems.

The Congo Basin contains some of the largest tropical rainforests in the world. Using nature-based sequestration alone, African countries can provide up to 30% of the world’s sequestration needs.

By 2030, more than 40% of the world’s youth will reside in Africa, whose labour potential and youthful dynamism will be vital in a world with rapidly ageing societies elsewhere.

The challenge lies in effectively harnessing these resources to turn Africa’s comparative advantages into global competitive advantages.

Africa’s Marshall Plan

For a long time, the extractive and commodity sectors in many African countries have been enclaves without meaningful linkages to local economies. The continent has been locked in perennial booms and busts that have amplified Africa’s vulnerability to global shocks. To rescue the SDGs, this must change.

Countries need to pursue sustainable industrialisation and economic diversification to transform Africa’s resources into inclusive growth and thereby tangible benefits for the continent’s people.

Recent crises have shown policymakers worldwide the importance of building resilient and dependable supply chains, shifting away from a primary focus on efficiency that has dominated past decades. This represents a paradigm shift of historic significance that can immensely benefit Africa.

In this context, the African Continental Free Trade Area (AfCFTA) is Africa’s Marshall Plan. By eliminating tariffs and non-tariff barriers, the AfCFTA is expected to facilitate the development of regional value chains and to boost intra-African trade by more than 30% by 2045.

In contrast to global value chains, regional value chains present African countries with greater opportunities to upgrade into higher value-added segments and to build increased forward and backward linkages.

In addition to bolstering trade among themselves, African governments must also implement smart industrial policies including well-structured local content and national supplier development programmes. Such initiatives would support the growth of robust local small-and medium-sized companies generating decent jobs – a pressing need, particularly in light of Africa’s substantial youth population. It is evident that the type of growth required in Africa must diverge from the fossil fuel-based model that characterised the development of today’s high-income countries in the 19th and 20th centuries.

This necessary transition is feasible and aligns with the earlier mentioned synergies between the various SDGs. Given Africa’s immense renewable energy potential, increased investments aimed at accelerating the energy transition will generate sufficient energy to bring electricity to the over-500m Africans currently lacking access and to power industries across the continent.

As a promising location for green hydrogen production, the continent has a great potential to supply renewable energy to other world regions.

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Africa’s wealth in critical minerals makes it possible to build value chains for green products, including solar panels and batteries.

A great example in this regard is the ongoing development of a competitive battery, electric vehicle, and renewable energy value chain in the Democratic Republic of Congo and Zambia. This project will enable Africa to participate in a market projected to have a value of $46trn by 2050.

It is crucial to emphasise that achieving sustainable and inclusive industrialisation and economic diversification necessitates a whole-of-government approach and cannot rely solely on a country’s Ministry for Trade and Industry. To ensure that structural transformation efforts are fruitful and inclusive, the continent needs to provide its people with the high-quality education and training needed to meet the market demands of an industrialised Africa.

To allow everyone to fulfill their potential, girls and women need to have access to these education opportunities, especially in traditionally male-dominated fields such as computer science.

Creating the optimal enabling environment

To achieve green and inclusive growth through structural transformation, establishing the right enabling environment will be pivotal.

It is imperative that we strengthen Africa’s agency by building ecosystems for transformational change and leadership.

Drawing inspiration from the ‘moonshot’ programmes that led to the historic moon landing in 1969, economist Mariana Mazzucato highlights the importance of creating structures that foster collaborative, mission-oriented thinking, and a shared sense of purpose.

To foster such an environment on the continent, we need leaders from all walks of life who are responsive and transparent, embrace multi-stakeholder consultations and work inclusively towards strengthening social compacts and domestic accountability.

Especially in the mining sector, local communities need to be given a voice that ensures their participation in the decision-making process. Such inclusive processes will protect human dignity and agency.

Inclusiveness is also crucial in nature conservation and the fight against climate change. A notable initiative in this regard is the Great Blue Wall project, which aims to increase marine-protected areas in the Western Indian Ocean region from 8% in 2021 to 30% by 2030, while simultaneously developing livelihood opportunities for 70m people.

Local stakeholders, with indigenous people and coastal communities at the forefront, will play a central role in the effective management of the connected network and will be supported in their efforts to sustainably use and benefit from natural resources.

Creating the right enabling environment also necessitates improved data, analytics, and metrics. While striving for sustainable industrialisation and economic diversification offers a strong guiding framework, each country’s circumstances are unique.

The choice of sectors to prioritise and the specific investments needed in infrastructure, natural resources, or human capital will be context-specific. Growth diagnostic studies, skills gap assessments, and hotspot spatial analyses are powerful yet underutilised tools.

These tools can assist governments in designing and targeting policies and investments for their context more effectively. Moreover, we need to move beyond GDP metrics to better capture what truly matters.

The immense natural wealth of African countries often remains unaccounted for in official statistics. We need to strengthen the capacities of national statistical systems to integrate natural capital accounting into national accounts.

This would enable countries to appropriately value their nature, informing nature-conservation efforts, ecological compensation schemes and countries’ participation in carbon markets.

Unlocking financing for development

Addressing the imperative of rescuing the SDGs requires discussing the crucial aspect of financing. Financing needs around the world and particularly in Africa are immense. For instance, the cost of transport equipment required to facilitate AfCFTA implementation is in the region of $500bn.

Due to more frequent extreme weather events and changes in weather patterns attributable to climate change, Africa alone is estimated to require up to $86bn annually for adaptation measures by 2030.

These are just two examples from a long list of investment needs. It is evident that all stakeholders need to step up their efforts to meet these needs: governments, the private sector, international financial institutions, and development banks. African governments will need to improve their capacity to mobilise existing domestic resources, including by combatting illicit financial flows.

The right domestic policy actions, such as the digitalisation of the tax system, could move the continent from a tax-revenue-to-GDP ratio of less than 17% towards levels currently seen in Latin and Caribbean countries, at nearly 22%.

Beyond this, African countries need to work towards building mechanisms that allow them to get compensated for the ecosystem services they provide to the world. Carbon markets are particularly relevant in this regard. Africa’s full participation in carbon markets has been hindered by a lack of efficient carbon market instruments, limited or absent legal and regulatory frameworks, and insufficient technical capacity.

At $120 per tonne of carbon, nature-based carbon credits could generate $82bn per year for Africa, which is 1.5 times the official development assistance received by the continent in 2018.

The UN Economic Commission for Africa (ECA) is actively supporting the 16 member countries of the Congo Basin Climate Commission, as well as other African countries in the development of their carbon markets.

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These domestic measures must be complemented by increased external financing on favourable terms. To make this possible, sustained advocacy for a fairer and more just global financial architecture is crucial.

Currently, many African countries cannot access international financial markets because of rising interest rates. Furthermore, a recent ECA publication finds that African countries appear to pay an unexplained premium of 1.7% on sovereign bonds issued on the international market.

Existing mechanisms for debt relief have proven inadequate for countries facing debt distress, further exacerbating their challenges. Against this backdrop, the UN Secretary-General has called for an SDG Stimulus of about $500bn per year, to take steps that include tackling the high cost of debt and rising risks of debt distress, scaling up affordable long-term financing for development, and expanding contingency financing for countries in need.

The Sustainable Debt Coalition, launched by Egypt during COP27, is specifically targeting these areas by focusing on the interconnections between climate, debt, and development.

Finally, the pivotal role of regional multilateral development banks must not be underestimated. These institutions play a critical role, both through direct lending to governments at affordable rates and via credit enhancements, such as guarantees, that can de-risk investments on the continent, helping to make Africa a globally competitive investment destination.