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Friday, May 24, 2024

Africa needs an additional $194 billion per year by 2030 to meet the Sustainable Development Goals


Africa needs an additional $1.6 trillion by 2030 — $194 billion per year — to meet its Sustainable Development Goals (SDGs).

According to the 2023 edition of African Development Dynamics, to attract more and better investment and fill this gap, African governments and their partners should improve the information they provide to investors, build the capacity of African development finance institutions, and promote regional project.

Real GDP growth in Africa is projected to reach 3.7% by 2023, returning to pre-Covid-19 levels. In addition to these positive economic prospects, the continent has unique human and natural assets that attract investors: half of Africa’s population is aged 19 or younger, and the proportion of young people who have completed high school or higher education is likely to reach 34% by 2019 . 2040, up from 23% in 2020.

natural capital

As for natural capital, which accounts for 19 percent of Africa’s total wealth, it presents a huge opportunity for investment in sustainable development: African forests, for example, added 11.6 million tonnes of net CO2e to global carbon stocks between 2011 and 2020, and the Congo The world’s largest carbon sink.

Despite this potential, the global crisis has had a more negative impact on investment in Africa than in other parts of the world. For example, Africa’s share of global greenfield FDI in 2020-21 has fallen to 6% (the lowest share in 17 years), while other high-income countries recorded their highest share ever (61%), Other regions accounted for 17% of the share of developing Asia accounted for 10%, Latin America and the Caribbean accounted for 10%. The cost of capital in Africa is also higher than in the rest of the world, driving some African governments out of bond markets while discouraging investment in transitional sectors such as renewable energy.

However, the sustainable financing gap is bridgeable: it amounts to less than 0.2 percent of the value of global financial assets, or 10.5 percent of the value of financial assets held in Africa. Thus, if 2.3 percent of global financial assets were allocated to Africa by 2030—less than the continent’s share of global GDP—the gap could be filled.

Based on a comprehensive assessment of financing sources in Africa, the report proposes several priorities for African governments and their partners to improve investor confidence and accelerate sustainable investment on the continent. Among them:


*African national statistical agencies should provide more and better data for national risk assessment. Likewise, investment promotion agencies and regulators should provide more detailed and up-to-date information in a uniform and user-friendly format.

* The international community should devote more resources to increasing the capital of 102 African development finance institutions (DFIs) and improving their capacity to act as intermediaries between international finance and local projects, especially in climate adaptation.

*African governments and regional organizations should accelerate the implementation of cross-border initiatives such as development corridors and digital infrastructure to reduce market fragmentation; provide targeted support for SMEs; actively monitor the investment protocol of the African Continental Free Trade Area (AfCFTA) implement.

In addition, the report’s case studies highlight the strategic areas with the greatest potential to attract investment in sustainable development in five regions of Africa: renewable energy in Eastern and Southern Africa, monetization of natural ecosystems in Central Africa, and climate finance and agriculture in North Africa. Food value chains in West Africa. — trade arab news agency


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