The Platform


“It is better that trials come to you in the beginning, and you find peace afterwards than for them to come to you at the end.” This African proverb aptly contextualises the core of building economic resilience, which can be summarised in simple terms like “anticipation, readiness, and early preparation.” At no time has this reality dawned on the African continent more than the present. Africa’s vulnerabilities are indeed shocking. Africa is heating up twice as fast as the rest of the globe, and with 20 countries already warming faster than the globe, this means that the safe threshold of 1.5℃ will be breached faster in Africa than in any other region. But climate change is only one red flag.

Throughout 2020 and 2021, the pandemic has wreaked havoc on the global system. This devastation, and the responses fostered by different countries, have served to expose Africa’s urgent need for resilient economies. Across the globe, different countries are offering multiple rounds of economic stimulus to spur growth. Cumulatively, it is estimated that around $12 trillion was issued in stimulus packages. This was affordable because this credit was accessible at interest rates as low as 0% in some cases.

However, the same convenience was not available for Africa, a continent whose needs were pegged at around $100 billion. This predicament highlights the low productivity of African economies that makes them high-risk for debt capital. The reality of minimal value addition, where the proportion of manufacturing value-added has stagnated at an average of just 10% of GDP since the 1970s, has come to hurt Africa in its time of need.

But what is economic productivity? Studies show that human capital is 15 times the value of natural capital, and 4 times the value of produced capital. A productive citizenry is therefore the bedrock of productive economies. How well public resources are invested to nurture such a population provides the best indicator of how productive our economies can be under changing climate. But we must first ask where these people are engaged right now.

Over 80% of Africans are engaged in the informal sector. This means that the story of Africa is incomplete without the informal sector. This sector is the chassis on which our economic engine thrives. It employs many people in the rural and urban areas and many of them depend on the agro-sector which employs over 60% of the population and leveraging this sector to create inclusive economic opportunities is our own fierce urgency of now. We urgently need to re-orientate our economies leveraging climate action solutions and the following tenets can set us on this path.

First, we must prioritise growing the economy, not distributing its proceeds. Africa’s budgetary expenditure continues to rise, but in recurrent expenditure, not in areas that can catalyse more opportunities. Just to give an example in the climate action area, it is estimated that Africa already spends up to 20% of its total adaptation needs annually, which amounts to $3 billion. But the big problem is that this money goes into social expenditure. The urgent need is to ensure these expenditures go into climate investment areas that directly empower citizens to establish enterprises that deliver competitive solutions to the continent’s challenges while offering a return in economic and financial dividends in addition to the traditional social benefits. Cooperatives incentivised to offer loans to enable these informal traders to access such effective climate action solutions will go a long way in preserving capital and catalysing income growth among this critical population whose impact over time is inclusive economic growth and competitiveness from the bottom up that includes most of the population.

Second, youth skills retooling. Over 60% of Africa’s population is young and up to 80% of these youth find work in the informal sector. How these youth can be tapped to become drivers of economic competitiveness is critical. Skills retooling is critical. Through innovative volunteerism, we are structurally guiding and inspiring young people of different backgrounds to turn their passions into profits and retool their skills in developing and decentralising climate action solutions that address on-demand areas among communities.

Third, targeted policy incentives, especially fiscal policies play a significant role in shifting market behaviour and investments from one area to another. Targeted fiscal incentives will go a long way in shifting both the consumer market as well as entrepreneurs in the informal sector towards climate action solutions such as solar dryers and in the agro-sector specifically in consuming organic foods to create markets in these areas of Africa’s strength.

What is clear is that policy incentive will accomplish very little if they fall on passionless, purposeless citizens. The bedrock of resilient and productive economies is a population that devises competitive solutions that turn challenges into opportunities.

We must know that economic readiness in responding optimally to emergencies is not a knee-jerk reaction, but a process of build-up and readiness over many years. As more emergencies continue to pile on the continent in the future, the only way we will find a reason to smile is if we orchestrate a paradigm shift towards building climate-resilient productive competitive economies that work for all.

The views expressed in this article are those of the authors alone and do not necessarily reflect those of any institutions with which the authors are associated.

Dr. Richard Munang is a multiple award-winning environment and development policy thought leader and climate change and sustainable development expert. Richard is also author of 'Making Africa Work Through the Power of Innovative Volunteerism' in 2018.

Robert Mgendi works with the Africa Climate Change Programme.