Financial News

Europe claims to be altering its priority in Africa from resource exploitation to sustainability


The European Union announced on the second day of the African Climate Summit in Nairobi that it was supporting Africa with assistance to create jobs through a special investment plan on adapting to climate change, adding another feather to a region that has long been accused of exploitation of Africa.

The President of the European Union (EU), Ursula Von Der Leyen, also said that the £150 billion ($156 billion) Global Gateway Investment Plan for Africa was revolutionizing how the European Union (EU) interacted with Africa.

Oil, gas, and other natural resources have been extracted from Africa for decades by EU members to fuel their businesses. Now that the bloc itself wants to stop using what they have tagged as dirty energy, and in turn, has been pressuring Africa to do the same. The fact that some African nations desire to enjoy the recently found resources before transiting has made this shift in policy contentious.

In the Democratic Republic of the Congo, Burundi, Rwanda, and Tanzania, hydropower projects are among the investments that the EU’s Global Gateway is aiming to attract.

Included in it is also the €1 billion ($1.1 billion) Initiative on Climate Adaptation and Resilience in Africa, which was unveiled by the EU during COP27, the UN climate summit held in Sharm el Sheikh, Egypt, in November of last year.

“We are not only interested in extracting resources. We want to partner with you to create local value chains, to create good jobs here in Africa,” Ms von der Leyen disclosed.

“We want to share European technology with you. We want to invest in skills for local workers. This is crucial for the young people. Because the stronger you are as suppliers, the more Europe will diversify supply chains towards Africa, and the more we will both de-risk our economies,” she added.

Additionally, she explained that it was time to put their much-discussed plans into motion, and disclosed Europe’s intentions to bridge Africa’s investment gap.

“First of all, we fully support the need for multilateral development bank reform. It is time to move from words to action absolutely. Secondly, investment has to come. Africa needs massive investment, and Europe wants to be your partner in closing this investment gap. This is why EUR 150 billion in our investment plan is designated for Africa, we call it Global Gateway. These €150 billion are aimed at the African continent,” she narrated.

She presented Namibia as an example, which is now establishing a new hydrogen sector as well as a value chain for raw materials in collaboration with Europe. With the full backing of Team Europe, Kenya, and the EU were anticipated to sign a new hydrogen partnership to advance the green hydrogen economy.

Akinwumi Adesina, president of the African Development Bank (AfDB), said during the summit that the bank will provide $25 million to funding for climate change. The session finishes on Wednesday. “Africa must use its natural gas and combine it with renewable resources. We must ensure that Africa’s food and agriculture are climate resilient,” said Adesina.

“We must revalue the wealth of Africa by accounting for the proper valuation of its natural resources, an example being the Congo forest which is a carbon sink. Africa’s GDP must be re-valued based on their carbon sequestration. Africa must develop its own carbon markets. It cannot be nature rich, and cash poor,” he added.