OPINION: Africa has no choice between economic growth and protecting the environment

Lite Nartey

June 19, 2024

Heathrow Airport in the UK currently uses more energy than the entire West African country of Sierra Leone. Despite Africa accounting for less than 4 percent of all global greenhouse gas emissions, many of its countries face significant threats from climate change, including increased droughts, floods, heat waves, and potential crop failures.

Climate change costs the continent 5 billion to 7 billion dollars yearly, a figure projected to reach 50 billion dollars by 2030. Estimates suggest its impact could push 50 million Africans below the poverty line, while 100 million are at risk of being displaced. At the same time, around 600 million people in Africa still lack access to energy, which is fundamental to economic development.

Tackling the twin imperatives of sustainable development – meeting the needs of the present without a negative impact on the future – and economic growth in Africa is paramount. It was a central theme at last September’s first Africa Climate Summit in Nairobi. However, these challenges are typically seen as being diametrically opposed. Often, they are discussed in isolation. This conversation needs to change. We must acknowledge that sustainable development and economic growth are interdependent – one cannot occur without the other.

Based on my research into the role of multinational firms in the development of emerging markets over the last decade, what’s missing in the debates are answers to the question facing many commodity-rich African countries: do they use their natural resources for development and damn the environment, or seek an alternative which acknowledges that sustainable development and economic growth are interdependent?

Africa’s economy is highly dependent on the extraction of natural resources, including oil and gas and minerals such as copper, cobalt, gold, and diamonds. Forty-five African economies are already reliant on commodity exports, including fossil fuels. Yet they face increasing pressure to abandon this potentially lucrative revenue stream.

Rather than the simplistic arguments that all extractive engagement is bad, the question that needs to be asked is how to extract resources while causing minimal environmental damage.

Bypassing simplistic answers

Not unfairly, people across Africa demand the same economic opportunities those in the Global North already enjoy. But here lies the problem. To achieve this, the most obvious solution for many African countries is to adopt the economic development model employed by the current developed countries. That means exploiting the large and relatively untapped natural resources within their borders.

As former Nigerian president Olusegun Obasanjo put it at the Africa Energy Week 2023: “Where is the justice when you used what (fossil fuels) was available to you, but we (Africans) can’t use it? You want to keep us in the habitual position of underdevelopment. We reject that!

“Where is the justice when you used what (fossil fuels) was available to you, but we (Africans) can’t use it? You want to keep us in the habitual position of underdevelopment. We reject that!”

Many African countries are realizing that using the natural materials found within their borders is crucial for continuing their economic development. Many have claimed that Africa can become a green industrial hub, exploiting its renewable energy resources and leading the charge toward decarbonization. However, raw materials are required to achieve this technological transformation and construct the necessary batteries, solar panels, and electric vehicles.

Companies need to find better ways to extract resources while causing minimal environmental damage. The good news is that this is already happening. Mining firms like the Bill Gates-backed KoBold Metals are now using artificial intelligence to predict the location of deposits, minimizing the negative environmental effects of test drilling.

Firms are also exploring the potential of keyhole mining technology to reduce the need for open mines, which have a serious environmental impact.

The challenge of context

A green revolution needs money, innovation, and technology to succeed. It also needs to address the unique needs of individual countries and even individual people. Put simply, the launch of a green revolution is expensive and context-specific.

Green technology has typically been designed, tested, and implemented in developed nations. Solar energy works if your country has a reliable and extensive energy grid that can store and effectively distribute the energy generated. It is not so practical when applied to a nation that has just emerged from a civil war and has a limited, damaged, or non-existent energy network.

Take the installation of solar streetlights in Nigeria. The idea seems great and uses technology that works elsewhere. Yet, it has been ineffective in practice. It’s not an isolated case. A 2017 research paper revealed some of the common causes of failure for renewable energy initiatives in sub-Saharan Africa. The study analyzed 29 publicly funded projects across ten countries, ranging from the electrification of public institutions and solar street lighting to micro-grid rural electrification.

The paper found that common factors contributing to failure included political agendas, flaws in the project awarding process, insufficient stakeholder cooperation, project planning and implementation issues, lack of effective maintenance, and challenges related to public acceptance and inclusion. The last two points underline the importance of local context in green projects.

Time and money

Grand sustainable solutions like wind farms, public transport networks, or geothermal plants also fail when viewed through a more local lens. In many developing countries, energy needs can be as localized and immediate as someone heading into the forest to collect wood so they can cook their evening meal. Mega projects take time that those who need energy now just don’t have.

Then, there is the question of raising the external investment for these projects. The Nairobi Declaration, signed at the Africa Climate Summit in September 2023, called for an almost six-fold increase in renewable energy capacity across the continent. Yet, according to a 2022 report by the Climate Policy Initiative, Africa has received only 12 percent of the finance it needs to cope with climate impacts. This is partly due to concerns over the risk of investing in the continent.

Engaging the right stakeholders in the right way

It is also important that “green” development benefits as many local stakeholders as possible. While governments are expected to lead this conversation, companies must share this responsibility.

I’ve previously written about how companies can communicate better with different stakeholders. They must also properly understand their different needs and the contexts in which stakeholders live.

Even in one country, the differences in how people get food, shelter, and energy can be vast. One plan won’t necessarily work for everyone. Too often, companies make misguided assumptions about what stakeholders want and need to improve their lives.

Very few people in developing countries will buy an eco-friendly cooking stove because it is better for the environment. But they will buy it if it makes their lives easier. The only way to understand people’s needs is to involve them in the process from the start. Firms need to design products and develop solutions that are sustainable, but they also must be practical and meet specific needs.

Creating new paths for sustainability

As countries worldwide seek to continue their economic development, they also need to address the growing impact of climate change. Having just one model for sustainable economic development is not an option. It’s important to consider regional and local challenges, listen to the voices and needs of local stakeholders, and accept that sustainable development means different things to different people.The Conversation_______________________________________________________________________________________________

Lite Nartey is an Affiliate Professor of Strategy at Insead (Fontainebleau campus) in France.


This article is republished from The Conversation.