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Environment & Poverty Times No. 5

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Africa’s natural resources key to powering prosperity

By Achim Steiner, Under Secretary General of the United Nations and Executive Director of the United Nations Environment Programme headquartered in Nairobi, Kenya

Africa’s leaders looking to economic priorities for the continent should be putting the environment high on the list. Report after report is now demonstrating that sustainable management of Africa’s natural resources is one of the keys for overcoming poverty. Sensitively, creatively and sustainably harvested and fairly shared, these resources can assist in meeting – and going far beyond – the internationally agreed development goals.

The 20th century was an industrial age – the 21st century is becoming increasingly a biological one. Africa, with its natural wealth or “nature capital” residing in its ecosystems – from forests to coral reefs – can be a leading player on this multi-billion dollar stage. Africa’s wealth of natural resources has always been an asset and has sustained its people during good and hard times. But their true value, the sheer scale of the wealth from Africa’s freshwaters and landscapes to its minerals and marine resources, has been invisible in economic terms. Only now are we getting glimpses, only now are the real economic figures coming to the fore.

Take the wetlands of the Zambezi River Basin. According to estimates outlined in the Africa Environment Outlook-2 (AEO-2), the economic value in terms of crops and agriculture alone of these wetlands is close to USD 50 million a year. The wetlands also have other economic importance. In terms of fisheries, nearly USD 80 million a year and in terms of maintenance of grasslands for livestock production, over USD 70 million annually. Wetland-dependent ecotourism is valued at more than USD 800,000 annually and natural products and medicines associated with wetlands on the Zambezi are worth over USD 2.5 million a year.

And it is not just wetlands. Take biodiversity for example, and the gorillas of the Great Lakes Region. It is estimated that tourism linked with gorilla watching now brings in around USD 20 million a year. It is a point echoed across the continent. South Africa’s coastal waters and unique wildlife are generating roughly USD 30 billion a year in economic and tourist-based activities. It can be a virtuous circle. In Madagascar, where nature-based tourism is the second largest foreign exchange earner, over 40 new protected areas covering about two per cent of its land area have recently been established.

Many of Africa’s ecosystems are not just serving the region, but the whole world. Joseph Stiglitz, the Nobel prize-winning economist, estimates that the carbon sequestration or “carbon-soaking” value of tropical forests – such as those in the Congo River Basin – probably equals or exceeds the current level of international aid being provided to developing countries. In other words, it is the developing world, and some of the poorest countries, that are helping the global community by freely removing large levels of the gases causing climate change. Some developed countries are recognizing that debt. They are turning to creative market instruments to repay this debt in a way that balances the need to fight poverty with a need to sustainably manage these income-generating natural resources.

France has signed a debt-for-nature swap with Cameroon under which USD 25 million will be invested in people and nature in the Congo River Basin. This is part of the wider Congo River Basin Partnership Initiative, born at the World Summit on Sustainable Development in 2002, involving the Basin’s six countries and a range of other governmental and non-governmental actors.

Many countries in Africa, like Gambia, are now mainstreaming environment into their Poverty Reduction Strategy Papers. They are also starting to turn to market instruments to balance economic concerns with environmental ones. Tanzania recently announced in its budget VAT exemptions for liquefied petroleum gas in order to reduce energy production from charcoal and wood. Kenya has announced that solar panels and related equipment will be zero-rated.

Countries in Africa are also becoming increasingly aware of the costs of inaction – of the price economies pay for lax environmental management and ecological degradation. A recent study in Egypt has found that pollution and environmental damage is costing that country alone over five per cent of its GDP.

There is also an urgent need for countries in Africa to maximize the opportunities under the carbon markets of the Kyoto Protocol and to fully engage in the Bali Road Map – the negotiations that need to lead to a deal at the climate convention meeting in Copenhagen in 2009 in order to deliver a climate change agreement to commence around 2012. Africa has a lot to lose and a lot to gain as a result of climate change. For example, one third of the continent’s coastal infrastructure is threatened by sea-level rise. Equally, hundreds of billions of dollars of investment is starting to flow from the North to the South under instruments such as the Protocol’s Clean Development Mechanism which can be invested in cleaner and renewable energy systems. Developed country governments also need to step up investments in adaptation and climate proofing economies in Africa.

The AEO-2 was compiled by the United Nations Environment Programme (UNEP) and researchers and scientists across Africa for the African Ministerial Conference on the Environment. But I sincerely believe it is essential reading for Africa’s health, planning and transport ministers up to Africa’s finance ministers and heads of state. For while the report is on one level a state of the environment report, it is also a pre-investment document. Why? Because it underlines how little of Africa’s natural wealth is actually being sustainably harvested.

One figure: Africa has numerous tourist attractions, yet it contributes only four per cent annually to the multi-billion dollar global tourism industry. And another: Africa’s renewable freshwater resource is, at close to 4,000 cubic km per year, about 10 per cent of the global freshwater resource and closely matches Africa’s share of the world population. Yet in 2005, only about five per cent of the development potential is being used for “industry, tourism and hydropower”, notes the report.

AEO-2 is also a kind of shareholders prospectus for a promising new enterprise, for it sets out choices as to how Africa’s leaders, through the New Partnership for Africa’s Development (NEPAD), might wish to develop this natural wealth in a sustainable way.

Africa urgently needs investment in hard infrastructure from roads and railways to ports, airports, schools and hospitals. But it equally needs investment in its soft infrastructure – in the ecosystem goods and services provided by nature. Investment to maintain and manage these natural resources well: Investment to unleash their huge economic and development potential for the benefit of the 800 million people in Africa today and for the generations to come.

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