Africa’s inclusion in G20 will speed up progress-Ofori-Atta

Minister for Finance, Ken Ofori-Atta has commended the Group of Twenty (G20) for its historic decision to include the African Union in its decision-making body.

According to him, the inclusion affords Africa will a prominent platform to articulate its narrative, address its challenges, and provide recommendations from an African perspective, thus allowing the continent to play a more active role in global development.

He pointed out that there had been a number of decisions taken without Africa on the board and is therefore happy that Africa will be part of designing solutions to Global challenges.

Ofori-Atta gave the commendation during the Rockefeller Foundation event on the Energy Transition Accelerator, held as part of the side meetings at the ongoing United Nations General Assembly.

The Energy Transition Accelerator (ETA) aims to fund the retirement of coal-fired power plants and promote the adoption of clean energy in Emerging Markets and Developing Economies (EMDEs) through the sale of carbon credits until 2030.

The ETA aspires to generate high-quality carbon credits to attract private investment, create jobs, foster socio-economic growth, and address urgent adaptation needs without worsening energy poverty.

The G20 is a forum comprising 19 countries with some of the world’s largest economies, as well as the European Union (EU) which meets to discuss global economic and political issues.

Between them, G20 countries account for 85% of the world’s economic output and more than 75% of world trade. They contain two-thirds of global population.

The G20 was founded in 1999 after the Asian financial crisis as a forum for the Finance Ministers and Central Bank Governors to discuss global economic and financial issues.

Ofori-Atta revealed that Ghana had signed a Memoranda of Understanding (M0Us) with Switzerland, Sweden, and Singapore, and was actively engaging with South Korea, which had expressed interest in collaboration.

He highlighted a significant development with Switzerland, where five million carbon credits would be exchanged for $100 million in carbon financing.

He underscored the considerable expense associated with carbon credits for African countries, despite their limited participation in carbon transactions or trade.

He emphasized the importance of ongoing partnerships involving philanthropic organizations, the private sector, and other stakeholders to shift the focus from lender’s risk to investment.

Africa faces substantial challenges related to climate change, incurring annual costs ranging from 5 to 15% of its per capita GDP.
Although the continent possesses abundant opportunities in clean and renewable energy, current climate financing falls far short of the required resources.

Africa needs $277 billion annually to fulfill its Nationally Determined Contributions by 2030, yet the current annual climate flows amount to just $30 billion, representing less than 11% of the necessary funding.

Additionally, almost 55% of Africa’s climate finance comes in the form of debt, with the private sector contributing only 14% of total climate finance and a mere 3 percent toward adaptation finance.

To adequately support Africa’s adaptation efforts and expedite its mitigation initiatives, the minister emphasized the urgent need for a substantial increase in financing.

Regrettably, Africa currently attracts less than one percent of global green bond issuances, despite its immense potential for green investments. Furthermore, the issuance cost for African green bonds exceeds that of similarly rated peers by more than double.

“As we move forward, it is crucial for the international community, including the private sector, to collaborate and ensure that African economies are not excluded from green finance opportunities due to perceived economic risks,” Ofori-Atta said.

The meeting witnessed the presence of notable figures, including Secretary John Forbes Kerry, the U.S. Presidential envoy on climate; Andrew Steer, President and CEO of Bezos Earth Fund; Axel van Trotsenburg, Senior Managing Director at the World Bank; Elizabeth Yee, Executive Vice President of the Rockefeller Foundation, and other distinguished personalities.