African leaders urge inclusion of natural capital in GDP calculations.
In a statement released on November 13 at COP29 in Baku, they highlighted Africa’s forests’ vital roles in carbon capture, pollution control, and soil and water retention.
The event, titled Measuring the Green Wealth of Africa, was co-hosted by President Denis Sassou Nguesso of Congo, Kenya’s Dr. William Ruto (represented by Musalia Mudavadi), and African Development Bank President Dr. Akinwumi Adesina.
Attendees included Presidents Paul Kagame of Rwanda, Emmerson Mnangagwa of Zimbabwe, and Faure Gnassingbé of Togo.
President Sassou Nguesso stressed the importance of valuing Africa’s underappreciated natural assets as integral to national wealth.
“We are doing useful work for Africa and the rest of the world, in contributing to the acceleration of the recognition of the environmental dividend,” he said.
Kenya’s President Ruto said at the heart of the leaders’ conversation is the need to “ensure that Africa’s ecosystem services such as carbon sequestration and pollution control are valued as global public goods.
He said, “by appropriately valuing our green wealth, countries can unlock financial flows into investments to boost our economies and even improve our credit ratings.”
President Paul Kagame of Rwanda said Africa is a key player in the fight against climate. “Unfortunately, Africa’s key obstacle remains access to climate finance.”
The Rwandan leader said he fully supports the bold agenda to measure the continent’s natural capital and added, “we are not asking for handouts but for the world to pay for something that has tremendous value for all of us.”
The leaders commended the African Development Bank Group for its leadership and dedication to finding innovative mechanisms to mobilize the required financial and technical support for natural capital accounting and measuring the Green GDP of African countries.
The Bank has produced a report on “Measuring the Green Wealth of Nations: Natural Capital and Economic Productivity in Africa”.
Adesina said the report sets out key actions to value and integrate natural capital in the measure of Africa’s GDP.
“Africa contributes significantly to global public good for tackling climate change with its vast resources of natural capital, its vast natural capital has been undervalued,” he pointed out.
This situation, he said, “makes Africa to be green rich but cash poor,” adding, “while the GDP of Africa was estimated at $2.5 trillion in 2018, this was 2.5 times lower than the estimated value of its natural capital, evaluated at $6.2 trillion, which partly includes some valuation of the ecosystem services.”
He stated that, according to the Bank’s initial estimates and “under very conservative assumptions,” Africa’s nominal GDP in 2022 could have risen by $66.1 billion if carbon sequestration was factored in. This amount exceeds the combined GDP of 42 African nations!
The Bank Group president voiced concern over what he called a ‘carbon grab,’ where numerous African nations are leasing out their extensive lands for carbon credits but receiving minimal benefits in return.
“While the price of carbon in Europe is high and could be as high as $200 per ton because of the strict EU Emission Trading Standards, carbon price in Africa could be as low as $3 to $10 per ton,” Adesina pointed out.
Consequently, Adesina said, Africa gets underpaid for carbon because its carbon sinks are undervalued.
Furthermore, “the sequestered carbon on the lands can no longer be used as part of the nation’s nationally determined contributions,” he said, “that means countries lose sovereignty over their lands.”
According to Adesina, “the ongoing carbon grab in Africa is a lose-lose proposition.”
In their statement, African leaders committed to collaborating with other developing nations and regions, including Latin America, the Caribbean, and Asia, to form a powerful global coalition advocating for the inclusion of natural capital in national GDP calculations.