Africa needs fair trade for ‘Just Energy Transition’ — AfDB
African Development Bank (AfDB) Group is fighting off measures by the European Union to keep Africa as exporters of raw materials, a move meant to thwart the continent’s industrialization efforts.
Advertisement
President of the Group, Dr Akinwumi Adesina, said in Doha that the introduction of a carbon border tax by the European Union could push Africa back into exporting raw commodities and undermine its industrialisation gains.
The European Union recently launched the initial phase of a Europe-wide carbon tax on imported goods as part of its climate change reduction measures, a development, Dr Adesina said could penalise African countries.
“African companies that are making cement, steel, aluminium, fertilizers and trying to export to Europe are going to be charged a border tax of 80 euros per tonne.
That is very expensive, and all that is going to do is that countries in Africa that already suffer from tariff escalation when they add value to what they produce, now you are forcing them down the value chain,” Dr Adesina said.
The AfDB President was speaking during a high-level panel session at the Doha Forum last Sunday, on the topic “Decoding the Debt Dilemma—Unveiling Multilateral Solutions.”
The Doha Forum is a global platform for dialogue by policy leaders on the world’s critical challenges to build innovative and action-driven networks.
“Africa is going to lose $25 billion annually,” Dr Adesina said adding that; “Africa deserves a carve-out on that taxation because we are financing Africa’s transition. You cannot industrialise just by renewables; you need a balanced energy mix that allows you to use your natural gas to be able to industrialise.”
He described natural gas as an essential resource for Africa that should not be restricted in foreign trade.
“Just trade is what we need, but give us just trade for a just energy transition,” Dr Adesina said and noted that; “Africa should not be penalised.”
He noted that by introducing general punitive measures that also affect developing countries, developed countries are “shifting the goal post” in the differentiated responsibility within the Paris Agreement by forcing developing countries to attain net-zero carbon emissions much earlier than stipulated.
Energy access, security
Commenting on the difficulty of achieving consensus on climate restrictions, including taxation, President of the World Economic Forum (WEF), Børge Brende, said it would be a long road to political agreement on a global carbon price. But at the same time, energy access and security are vital.
“Moving to a society which is decarbonised takes time,” Mr Brende said and added that; “We have to find bridges between coal as the most extreme form of fossil fuel through natural gas. We have to move at a speed which makes sense, is cost-effective, and there is a price to be paid.”
Considerations
Qatar’s Minister of Finance, Ali bin Ahmed Al Kuwari, said targets set by climate change experts had at times been “too ambitious, too aggressive, and had not properly taken into consideration transition periods. Qatar, on the other hand, has established a reputation as a responsible supplier of energy to the world.
Qatar believes that natural gas will be the transition fuel and should be adopted. We have invested in increasing our production by 65 per cent and reach a maximum of that production by 2027. ‘It’s very important for climate change goals to be realistic.”
