How can Africa energise when caught in a debt trap? What would a truly just transition look like? What won't be on the table in Dubai?
The climate and energy challenges facing Africa are closely related to but highly distinct from those facing developed countries. Ahead of the international climate talks in Dubai, where we will likely see dozens of positive-sounding announcements, Fadhel Kaboub, an expert in economic sovereignty in the Global South, spoke to our climate editor James Wan about what a truly just transition would look like for a continent that has long been rooted at the bottom of the value chain.
In the run-up to COP28, we will be publishing explainers with experts outlining the issues of importance for African countries in the negotiations. See more here.
As experts explain the need to phase out fossil fuels and ramp up clean energy worldwide, what are the specific energy challenges facing Africa?
Today, about 600 million people in Africa have no access to electricity. And yet, less than 2% of global investments in renewables come to our continent. Moreover, the majority of renewable energy infrastructure on the continent is designed for energy to be exported to Europe. You also have 970 million people (mostly women and children) who are inhaling toxic fumes on a daily basis because of a lack of access to clean cooking technology.
At the same time, we cannot disentangle Africa's fate from the rest of the world's actions on energy. It is due to the historic and ongoing burning of fossil fuels that we are facing this climate crisis, with countries 15 degrees above and below the equator set to face its most intense impacts. We're already seeing droughts, floods, and forest fires across the continent. The World Bank estimates that we will see hotspots of internal climate migration by 2030, with 216 million people globally - 105 million in Africa - forced from their homes by 2050. On the climate clock, 2030 is the day after tomorrow and 2050 is the day after that.
Why is there such extensive energy poverty in Africa?
To understand this, we must look at Africa's place in the global economy more broadly and historically. During colonialism and in the post-colonial period, Africa has played four basic roles: as a place for the industrialised world to get cheap raw materials; as a place for the Global North to sell its industrial output to a large consumer base; as a site for exotic tourism, which is another extractive industry; and as a destination for obsolete technologies like assembly line manufacturing that are no longer needed in the Global North.
We dress up some of these as development and job creation, but they all lock Africa at the bottom of the global value chain. African countries import machinery, fuel, the components to assemble, and even the packaging, and then use their low-cost labour to compete against each other and create a race to the bottom. They import high-value added products and export low-value added ones. Even if you can quadruple your exports, you're still locked at the bottom of the value chain.
If you don't have a long-term strategic vision for yourself, I guarantee you that you're already part of somebody else's. And that's been true of Africa for decades in relation to economic powers like the US, Europe, and China today. All three, with slight variations, see the Global South and Africa in particular through that same colonial lens - as a site for cheap raw materials, a dumping ground, the bottom of the value chain. These outside visions are sadly completely compatible with energy poverty for hundreds of millions of Africans.
According to mainstream models, what is the solution?
Technical advice from the World Bank and IMF focuses on supporting African countries to deal with their debt crises so they don't default, which would lead to more economic problems. That is seen as the priority and the responsible thing to do for African economies. Repaying this debt, which is denominated in foreign currencies, requires generating dollars revenues, and the fastest way to do that is to extract minerals and focus on exports.
The problem is that this is a trap. The more you encourage low value-added exports, the more fuel, components, machinery, packaging, and other inputs you need to import. Tourism as a source of foreign currency reserves is similarly problematic and requires further imports. Decades after the World Bank and IMF have been operating in Africa, we're still in a debt trap. That's either down to incompetence or intentional entrapment.
We can also take a step back and look at the source of the debt, which is structural trade deficits: i.e. the fact that countries import more than they export each year. We have deficits in everything from energy - even Nigeria, Africa's biggest oil exporter, imports nearly 100% of its gasoline - to food, with UNCTAD estimating that Africa imports 85% of its food.
Again, we got here not simply by accident. The continent was the breadbasket of the world during colonial times. This changed after the EU introduced the Common Agricultural Policy in 1962, which used its huge wealth to introduce enormous subsidies to its farmers. The Soviet Union did a similar thing, as did the US, Canada, Japan, Australia. The result is that the Global South could no longer compete on core crops and - encouraged by the World Bank and IMF - started specialising in non-native cash crops for export, requiring more imports of fertilisers, pesticides, and foreign seeds as well as food for domestic consumption.
If the mainstream model is a trap, how can Africa break out of it? What would be a truly effective approach?
We need a just transition, and that means transition from a system that is unjust and has excluded millions of people to one that is inclusive, equitable, and sustainable. Africa's energy challenges are related to health, gender, development, climate and more, and the opportunity to tackle all these problems simultaneously is actually within reach. Africa has an abundance of strategic minerals - that are currently exported in raw form - along with the capabilities needed and a large internal market that can support industrialisation and economies of scale. But to harness this, Africa will need to reject mainstream development models and instead deploy strategic investments in food sovereignty, agroecology, renewable energy infrastructure for its own use, and transformative industrial policies that break from assembly line manufacturing and extractives.
Unfortunately, it is precisely these attempts at decolonising the global economy that have been crushed by the Global North since the 1960s and before. The Bretton Woods financial architecture was established in 1944 when most of Africa was colonised. We are still beholden to a colonial system that is delivering colonial results.
These patterns can take a variety of forms. At COP28, for instance, we will likely see the EU announce a clean cooking plan for Africa. This sounds good but is primarily of benefit to the EU. It is effectively a European industrial policy. It's the EU that will manufacture the clean cooking infrastructure and create millions of jobs for the next 30 years. This output will be deployed in Africa likely via loans as well as some grants and charity. While greenwashed as a positive for a continent, it in fact guarantees that Africa will once again be the consumer of European technology.
What are negotiators likely to be discussing on these issues at COP28. What should Africa advocate for?
These big structural issues are sadly unlikely to be on the table at COP28 but there is still lots at stake for Africa on energy, climate, and just transitions.
The first crucial item is the need to phase out fossil fuels. Recent reports have confirmed yet again that we need to rapidly phase out fossil fuels by 2030. We're currently on track to burn double what we have the carbon budget for and we're putting in new fossil fuel infrastructure to the tune of over $500 billion each year. It's the responsibility of historic polluters to accelerate their phase out first and to finance the transition of developing countries that are locked into a fossil fuel energy system. The Fossil Fuel Non-Proliferation Treaty Initiative has been endorsed by hundreds of Nobel laureates, faith groups, scientists, cities, along with eight sovereign countries. African countries should push for it to drive agreement to phase out fossil fuels at COP.
The second critical issue is climate finance. The Loss and Damage fund will be under discussion, and it remains to be decided who will fund it and according to what formula. It ought to be funded by developed countries in line with their historic emissions since the Industrial Revolution. The likes of the US and EU will want to include China as a major polluter, which it is, but it is not a historic one. If you discount the last 20-30 years, China has long been a poor developing country that has only made a dent in terms of climate impact. Moreover, Chinese emissions have not primarily been for consumption in China but the Global North, which outsourced its dirty industries.
Let's recap where we are in terms of climate finance. 15 years ago, rich countries pledged to mobilise $100 billion/year for poor countries. This goal may only be reached this year, and it has mostly taken the form of loans, which contribute to the debt trap. We also have the Green Climate Fund, which has barely raised $12 billion for the entire Global South. And then you have the Loss and Damage Fund, which is currently empty.
These sums are not just puny in comparison to the trillions needed. They are also almost negligible when compared to the estimated $2.2 trillion that moves from poor countries to rich countries each year including in the form of tens of billions of tonnes of raw materials and hundreds of billions of hours of human labour per year. That's why you increasingly see calls from the Global South to transform the global financial architecture, not just improve access to finance or get lower interest rates.
Why won't transformative issues like this be discussed at COP28?
Firstly, because there's resistance from the Global North. Secondly, because we in the Global South still lack a coherent and united front on these issues. They are mentioned here and there but tend to be watered down, for instance in calling for debt to be restructured rather than cancelled or for lower-interest loans rather than climate reparations.
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A lot of African countries are so desperate for financial support that they settle for crumbs or false and dangerous solutions like carbon markets. A big bulk of climate finance is in fact going to come from carbon credits, which are essentially pollution permits for polluters in the Global North who are unable or unwilling to decarbonise. Carbon credit schemes don't reduce emissions. They displace communities. They're extractive and mostly benefit middlemen. They see countries giving up territorial sovereignty over huge swathes of land. But if you're desperate because you owe debt that's due in three months, a few million dollars here and there will help. It's a colonial system now being greenwashed a little.
How can Africa escape this situation?
I believe in education in the broadest sense of the term - educating, empowering, mobilising from the bottom up. The good news is that civil society in Africa is clear, focused, and coherent in terms of what needs to be done and some of that is reaching our leaders. As Martin Luther King Jr said of the civil rights movement, we have no time for the tranquillising drugs of gradualism and incrementalism.
We need to change the terms of the debate. This is possible. We were surprised last year, for example, when developing countries putting aside their differences at the last minute in pushing for a loss and damage fund at COP27. We should stop pretending that the Global North doesn't have the resources, the moral and financial responsibility, and the technology to finance that fund with $3-5 trillion. After WW2, the US - still recovering from the Great Depression - gifted the equivalent of 5% of its GDP or about $1.2 trillion in today's money to Germany under the Marshall Plan.
Change is possible, but it will require unity, courage, and solidarity from the Global South, and that will have to come from the bottom up.
Fadhel Kaboub is an associate professor of economics at Denison University (on leave) and the president of the Global Institute for Sustainable Prosperity. He is also a member of the Independent Expert Group on Just Transition and Development, and serves as senior advisor with Power Shift Africa. Dr Kaboub is an expert on designing public policies to enhance monetary and economic sovereignty in the Global South, build resilience, and promote equitable and sustainable prosperity. His recent work focuses on Just Transition, Climate Finance, and transforming the global trade, finance, and investment architecture.
