Without strategic actions to combat climate change, the global economy could witness a decline exceeding 18 percent of its current GDP by 2048, with most severe impact felt by developing countries, particularly those in Africa.
This warning comes from Thabo Thamane who serves as CEO of Citizen Entrepreneurial Development Agency (CEDA) and Chairman of the African Association of Development Finance Institutions.
As the AADFI Chairman and CEDA CEO Thamane was giving the opening remarks at the Official Opening of the Joint International CEO Forum of the Association of African Development Finance Institutions (AADFI) and the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), held from November 8 to 10, 2023, in Abuja, Nigeria.
According to Thamane, the world is facing the negative impact of climate change. As a result, he said human health and safety, food and water security, and sustainable socio-economic development are threatened globally.
“Reports predict that if strategic actions are not taken to combat climate change, the world economy will lose more than 18 percent of its current GDP by 2048, and the least developed countries, particularly those in Africa, Asia-Pacific, and Latin America, will suffer the worst consequences,” he said.
He added that Africa, for instance, is estimated to lose 5 percent to 15 percent of its projected GDP by 2050, with a projected climate adaptation cost of $10 to $30 billion annually by 2030. At the same time, he noted that the Asia and ASEAN countries are projected to lose 26.5 percent and 37.4 percent of their GDP by 2048 if immediate action is not taken to mitigate the effects of climate change.
“We are in a climate emergency today, as highlighted in UNDP publications. As we focus on addressing the challenges of climate change, we are also aware of the need for just transition,” he stated. He added that this calls for urgent action from all stakeholders and responding just and equitably.
As an Association of DFIs, Thamane said the AADFI will continue to leverage partnership and collaboration in advancing the Paris Agreement. Such cooperation is shown in their membership of the WFDFI, their relationship with their colleagues in Asia and the Pacific, the African Financial Alliance on Climate Change (AFAC), and their involvement in the Finance in Common Summit, a global coalition of over 500 plus Public Development Banks (PDBs), according to Thamane.
He further revealed that the AADFI has strategically repositioned its commitment to achieving the Paris Agreement by setting up a Working Group on Climate Change to deepen its involvement in advancing it.
“You will, therefore, agree with me that the theme of the AADFI-ADFIAP Joint International CEO Forum is of significant importance,” he said.
Discussions at the forum were aimed to sustain awareness of the overarching climate challenges and share experiences from various regions on solutions and mitigation strategies.
They were also targeted at developing an actionable plan on how DFIs in developing countries can leverage global partnership and support to deliver on the agenda of a climate-smart future, agree on achievable and measurable climate agenda targets that national DFIs in Africa and Asia can incorporate into their business models, particularly in promoting climate-resilient and low-carbon development in their regions and come up with workable ideas on strengthening collaboration and partnership in addressing climate finance needs in our regions.
According to Thamane, the gathering also provided an opportunity to foster integration in Africa and cooperation across the continents. The Joint International CEO Forum of AADFI and ADFIAP is a biennial event aimed at building global partnerships to promote and finance development in the members’ regions and to strengthen South-South Cooperation.
The Forum was held under the World Federation of Development Financing Institutions (WFDFI). The first edition was held in Johannesburg in 2012, followed by Malaysia in 2014, Gaborone Botswana in 2016 (hosted by the Citizen Entrepreneurial Development Agency – CEDA), then Northern Cyprus in 2018, and now in Abuja, Nigeria in 2023. COVID-19 disrupted the sequence. But the forum is returning to normal.
The next edition of the AADFI-ADFIAP Joint International CEO Forum will be held in 2025 and hosted by ADFIAP members in Asia.