African Development Report 2012
Towards Green Growth in Africa

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African Development Report 2012
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African Development Report 2012
Overview

Towards Green Growth in Africa

Foreword
Africa’s robust economic growth, averaging five percent a year over the last ten years, has placed the continent among
the fastest growing regions in the world. During the past decade, poverty rates on the continent have declined andthe attainment of other MDG targets is within sight.
Although headcount poverty rates have decreased, Africa is still a poor continent and rapid economic growth has
not reduced inequality. Hunger remains widespread on the continent, especially in sub-Saharan Africa, while accessto energy is inadequate. Environmental and socioeconomic changes present further challenges for Africa. Notably,
climate change, global population growth and shifting consumption patterns are putting additional pressure on Africa’s natural resources.
Viable solutions to these and future challenges are anchored on growth pathways that encourage efficient and sustainable management of natural assets; are less carbon-intensive than conventional pathways; and ensure that the benefitsof growth are shared equitably to ensure poverty reduction, reduce income inequalities, and improve livelihoods.
The African Development Bank has placed inclusive growth and the transition to green growth at the center of its
new Ten-Year Strategy (2013-2022). The transition to green growth is part of a broader push for quality of growthand is focused on empowering African countries to reach their development objectives in a more resource efficient,sustainable and resilient manner. The Report underpins the Bank’s emphasis on strengthening the robustness, sustainability and inclusiveness of growth on the continent in a time of rapid change. It provides innovative analyticalperspectives and critical inputs into the discussion of what green growth means for Africa’s development.

Donald Kaberuka
President,
African Development Bank Groupii

African Development Report 2012 – Towards Green Growth in Africa

Acknowledgements
The African Development Report 2012 was prepared under the overall guidance of Prof. Mthuli Ncube (Chief Economist
and Vice President – ECON), Gilbert Mbesherubusa (Vice – President, Infrastructure, Private Sector and Regional
Integration), Aly Abou-Sabaa (Vice-President, Sector Operations II), Steve Kayizzi-­Mugerwa (Director, Development
Research Department), Hela Cheikhrouhou (Director, Energy, Environment and Climate Change Department), Abebe
Shimeles (Division Manager, Development Research Department), and Kurt Lonsway (Division Manager, Energy,
Environment and Climate Change Department).
The report was jointly produced by the Development Research Department and the Energy, Environment and Climate Change Department. The core team was comprised of Adeleke Salami (Task Manager), Frank Sperling (Co-Task
Manager), Anthony Simpasa, Jacob Oduor, Robert Kirchner, Vinaye Ancharaz and Ghecham Mohieddine. Wisdom
Akpalu (State University of New York Farmingdale, New York) coordinated the Report.
The material in this Report draws on background papers by Wisdom Akpalu, Channing Arndt, Kristi Mahrt, Gunnar
Köhlin, Precious Zikhali, Afaf Rahim, Elizabeth Robinson, Yonas Weldegebriel Alem, Salvatore Di Falco, Nadege
Yameogo, David Ockwell, Robert Byrne, Katharine Vincent, Timothy Koomson, Frank Sperling, and Kevin Urama.
The team wishes to thank Gabriel Umoh, Claudia Ringler, Edward Barbier, Kwadwo Asenso-Okyere, James K. Benhin,
and Witness Simbanegavi for reviewing initial drafts of the Report. Comments and suggestions from sector experts
from various departments of the African Development Bank are highly acknowledged. In particular, appreciation isextended to the Bank’s Green Growth Team and participants at the Bank seminar. Special gratitude goes to Yogesh
Vyas, Daniel Gurara, Gilbert Galibaka, Florence Richard, Elodie Dessors, Monojeet Pal, Mafalda Duarte, Sebastian
Delahaye, Olufunso Somorin, Osman-Elasha Balgis, Ignacio Tourinosoto, Awa Bamba, and Anthony Nyong for theirconstructive comments and insightful suggestions.
Editorial services were provided by Cyndi Berck and John Ward, while Anna von Wachenfelt, Urbain Thierry Yogo,
Ishmael Abeyie, Lauréline Pla, Abdelaziz Elmarzougui and Imen Rabai provided valuable research assistantship.
Ahmed Jeridi provided statistical assistance. The administrative team comprising Rhoda Bangurah, Josiane Kone
and Abiana Nelson provided logistical support to the Report.

African Development Report 2012 – Towards Green Growth in Africaiii

Table of Contents
Foreword		
Acknowledgements
Abbreviations
1.
Introduction

ii
iii
v
1

2.

The Necessity of Pursuing Green Growth
2.1 Africa’s Economic Resurgence
2.2 Africa in the 21st Century

3
4
5

3.

The Role of Green Growth in Promoting More Sustainable Growth and Development Options
3.1 Getting the Most out of Renewable Natural Resources Endowments
3.2 Energy Security, Fossil Fuels and Opportunities for Low-Carbon Development

7
8
11

4.

Technology Transfer for Green Growth in Africa

14

5.

Financing Green Growth in Africa

17

6.

Creating an ­Enabling Environment for Green Growth

20

References		

24

FiguresFigure 1: GDP Per Capita by Region (Constant 2000 US Dollars)
Figure 2: Medium Variant Population Projections
Figure 3: Qualitatively Different Flows of Hardware and Knowledge in the Technology
Transfer Process and their Contribution to Different Types of New Capacity

4
6
16

TablesTable 1: Renewable Energy Potentials Across African Regionsiv

African Development Report 2012 – Towards Green Growth in Africa

12Abbreviations
AfDB		
African Development Bank
AR4		Fourth Assessment Report of the Intergovernmental Panel on Climate Change
ADBI		
Asian Development Bank Institute
AU/NEPAD	African Union’s New Partnership for Africa’s
Development
CAADP	Comprehensive Africa Agriculture
Development Program
CAR		
Central African Republic
CDM		
Clean Development Mechanism
CFU		Climate Fund Update
CGIAR	Consultative Group on International Agricultural Research
CIC		
Climate Innovation Center
CO2 		
Carbon Dioxide
CO2 eq
Carbon Dioxide Equivalent
ECOSOC	United Nations Economic and Social
Council
EEZ		
Exclusive economic zone
EMBO	European Molecular Biology
Organization
EITI		Extractive Industries Transparency
Initiative
FAO		
Food and Agriculture Organization
FDI		
Foreign Direct Investment
GDP		
Gross Domestic Product
GER		Green Economy Report
GHG		
Greenhouse Gas
GHI		
Global Hunger Index
GoE		
Government of Ethiopia
IEA		
International Energy Agency
IFAD		International Fund for Agricultural
Development
IFPRI		International Food Policy ResearchInstitute
IPCC		Intergovernmental Panel on Climate Change

IPRs		
Intellectual Property Rights
IRENA
International Renewable Energy Agency
NTFPs
Non-timber Forest Products
ODA		
Official Development AssistanceOECD	Organization for Economic Cooperation andDevelopment
PRSP		
Poverty Reduction Strategy Paper
REDD	Reducing Emissions from Deforestation and
Degradation
RET		
Renewable Energy Technology
R&D		
Research and Development
SEA		
Strategic Environmental Assessment
SEFA		
Sustainable Energy Fund for Africa
SMEs		
Small and Medium-sized Enterprises
SSA		
Sub-Saharan Africa
SSA SDM	Sub-Saharan Africa Summary for
Decision Makers
TT		
Technology Transfer
T21		
Threshold 21
UNCTAD	United Nations Conference on Trade andDevelopment
UNDP
United Nations Development Program
UNEP
United Nations Environment Program
UNFCCC	United Nations Framework Convention on
Climate Change
UN-HABITAT	United Nations Human Settlements Program
WHO		
World Health Organization
WWAP	World Water Assessment Program

African Development Report 2012 – Towards Green Growth in Africavvi

African Development Report 2012 – Towards Green Growth in Africa

Introduction

1

Chapter

Reducing poverty and improving livelihood prospects remain an absolute priority
in Africa, but the aim should be to identify development choices that reacheconomic objectives while also ensuring that a country’s social and environmental
assets are managed effectively and sustainably.
African Development Report 2012 – Towards Green Growth in Africa

11Introduction

Africa’s recent growth reflects many years of policy reforms
coupled with a surge in extraction and export of its natural
resources. To sustain this growth, and make it more inclusive,
will require difficult policy choices in the long term. Current
practices have implications for sustainability of natural assets,
which are the source of livelihood for the vast majority ofthe population in Africa. For instance, the agriculture sector
employs about 60 percent of Africa’s total population andcontributes a third of its GDP. With the challenges of the 21st
century, such as climate change and population growth, it
has become imperative for Africa to pursue a new model ofgrowth, namely green growth.
Green growth, which focuses on environmental sustainability and inclusiveness, provides a unique opportunity forthe future of Africa’s economy and society. It is against thisbackground that the theme of the African Development
Report 2012 has been conceived. This Report discusses theimportance of pursuing green growth for Africa’s development while acknowledging the challenges for growth in the
21st century.
Green growth has different meanings depending on region and context. In this Report, however, the definition of
the African Development Bank (AfDB) has been adopted.
According to the Bank, green growth is “the promotion
and maximization of opportunities from economic growththrough building resilience and managing natural assets
efficiently and sustainably, including enhancing agricultural
productivity and promoting sustainable infrastructure.”
The Report makes a case for growth pathways that use natural
capital and ecological systems efficiently and sustainably; thatare low-carbon; and that share the benefits of growth in orderto reduce poverty and income inequality. The Report further

2

African Development Report 2012 – Towards Green Growth in Africa

discusses the financing needs of green growth in Africa, how
to create an enabling environment, and the entry points for
the AfDB in mainstreaming green growth in Africa.
The purpose of the Report is to stimulate discussion on therole of green growth in the African development process.
Thus, the Report looks at the current characteristics of economic growth on the continent and discusses the environmental and socioeconomic challenges confronting Africa’s
societies and economies. In doing so, the Report explores
the role of key sectors and technologies in promoting moresustainable growth and development options. These issues
are taken up in Chapters 1 and 2. Chapters 3 and 4 discusses
the management of Africa’s renewable natural resources,consisting of agricultural land, water resources, forest stocks,
fisheries and biodiversity. Chapter 5 examines the implications of improving energy security on the continent, taking
into account the role of fossil fuels and opportunities for
low-carbon development. Chapters 6 to 9 highlight strategies required to facilitate green growth in Africa. Chapter
6 focuses on the role of technology transfer in promoting
development choices that enable green growth, while Chapter
7 discusses opportunities and challenges of financing green
growth in Africa. Finally, the Report concludes by discussing
how the enabling environment for green growth can be improved (Chapter 8), also taking into account the facilitatingrole the AfDB can play (Chapter 9). The broad scope of the­discussions covered in these nine chapters of the main report
is condensed into six chapters in this overview

The Necessityof Pursuing
Green Growth2
Chapter

To rectify the problems of environmental degradation and ­inequality while
maintaining growth, African countries will need to pursue green growth pathways.
Green growth should be viewed as a forward-looking model central to thedevelopment needs of the 21st century
African Development Report 2012 – Towards Green Growth in Africa

32	The Necessity of Pursuing
Green Growthfrom the civil conflicts in a number of African countries
such as Côte d’Ivoire and Mali. Thus, even after factoring in the effect of these crises and the effect of the Arabuprising in North Africa, which lowered the continent’s
growth, Africa’s growth has remained resilient, rebounding
strongly to nearly 7 percent in 2012. The medium termprospects are also solidly firm, with growth expected toaverage 5 percent between 2013 and 2014.

2.1 Africa’s Economic Resurgence
Following several decades of economic stagnation, mostAfrican countries have experienced sustained economic
growth in the last 15 years. This has placed a number ofthese countries among the fastest growing economies in theworld. Between 2001 and 2012, Africa’s average annual rateof GDP growth stood at 5.2 percent. Although the effectof the global crisis in 2009 on Africa was significant, it wasless severe than in most other regions (AfDB et al., 2011).

In spite of this progress, many challenges remain. As
shown in Figure 1, Africa still lags behind other developing regions, such as East Asia and the Pacific and theLatin American countries, in terms of GDP per capita.
The environmental basis for growth and poverty reduction is also progressively being eroded. In some parts ofthe continent, growth has been driven mainly by highrates of extraction or depletion of natural capital, such as

Remarkably, Africa’s recent solid performance has occurred against a backdrop of global headwinds (including
the Eurozone debt crisis), adverse supply shocks fromdrought in both eastern and western Africa, and a seriesof country-specific shocks, including the spillover effects

Figure 1: GDP Per Capita by Region (Constant 2000 US Dollars)
6,000

East Asia & Pacific
Latin America & Caribbean
South Asia
Sub-Saharan Africa
Africa5,000

North Africa

4,000
3,000
2,000
1,000
0

1960

1965

1970

1975

1980

1985

1990

1995

2000

Source: African Development Report 2012 team, based on data sourced from AfDB and World Bank databases.

4

African Development Report 2012 – Towards Green Growth in Africa

2005

2012

forest stocks, fossil fuels, agricultural soil, fisheries andmineral resources (AfDB, 2012; Sperling et al., 2012).
Available evidence indicates that, between 2000 and
2005, Africa accounted for more than half of the global
forest loss (FAO, 2007; UNDP, 2007). Water is becoming
increasingly scarce, as population growth, agricultural
expansion and industrialization all contribute to growing
demand. Most aquifers in Africa are dropping (Oteino,
2013; Stock 2004).
There is a strong inverse relationship between economic
growth and poverty in the continent. Despite this, growth
has not been inclusive. Africa exhibits a greater degreeof inequality than all other regions of the world, except
Latin America (Günther and Grimm, 2007). In 2011, 6of the world’s 10 most unequal countries were in Africa:
Namibia, South Africa, Lesotho, Botswana, Sierra Leone
and Central African Republic (the latter two are classified as fragile states). In addition, job creation has been
limited, and those without employment lack adequate
social protection.
To rectify these problems of environmental degradationand inequality while maintaining growth, African countries will need to pursue green growth pathways.

2.2 Africa in the 21st Century
The need to pursue green growth becomes even more
apparent when global and regional trends in the 21st
century, in particular climate change and population
growth, are considered. The effects of climate change
are increasingly becoming visible around the globe,
and it is by now well established that human activities
are the predominant cause (IPCC, 2007a). Managing
the risk associated with climate change has long beenrecognized as a pivotal development issue (e.g., AfDB etal. 2003). Population growth creates both opportunities
and challenges. On the one hand, it means a potentiallylarger work force that can be more productive, provided
the right educational measures and employment opportunities are created. On the other hand, more people
will need to share natural resources at a time whenmany ecosystem goods and services are in decline (MEA2005). Green growth’s emphasis on improving resource
use efficiency, minimizing waste and pollution, and enhancing resilience is central for preparing the African
continent for the demands of population growth andclimate change.

Climate Change and its Impacts on Africa
By altering the continent’s natural resource systems,
climate change poses a serious threat to Africa’s economic growth and the well-being of its citizens. Africa
is widely viewed as being particularly vulnerable tochanging climate conditions due to its high climate
sensitivity and relatively low adaptive capacity (IPCC,
2007a; Collins, 2011). The contribution of the Working
Group II to the Fourth Assessment Report (AR4) of theIntergovernmental Panel on Climate Change (IPCC),
in its discussion of Africa, states that “projected reductions in crop yields in some African countries could be
as much as 50 percent by 2020, and crop net revenues
could fall by as much as 90 percent by 2100, with small
farmers being the most affected” (IPCC, 2007a). Other
studies have found similarly disconcerting results. For
example, Lobell et al. (2011) report that about 65 percent of present maize-growing areas in Africa would
experience yield losses for each one degree Celsius
increase in warming under optimal rain-fed management. Large losses in crop yields could have significant
macroeconomic consequences, particularly with respect
to poverty reduction. Therefore, Africa should be readyto adapt by investing in critical human capacity as well
as flexible and functional institutional capabilities tocope with shocks.
Furthermore, although Africa emits less than 4 percent
of global CO2 emissions, during the last decade, the total
CO2 emissions from the continent increased by 35 percent(IEA, 2012). Given Africa´s vulnerability to changing
climatic conditions, African countries have an interest in
being part of the solution to climate change, both throughimplementation of effective and efficient mitigation policies and through advocacy for these policies within the
global community.

African Development Report 2012 – Towards Green Growth in Africa

5Africa’s Population Growth
The population of Africa is projected to more than double
between 2010 and 2050, accounting for nearly half of theworld´s population growth over this period (see Figure 2).
By 2025, the population of Africa is projected to surpass thatof China and, by 2030, Africa will be more populous thanIndia. By 2050, nearly one person in four on the planet will
be an African. Moreover, nine out of ten persons in Africa
will reside in sub-Saharan Africa (SSA).

opportunity, it carries substantial challenges. If the continentcontinues to grow at current rates, the size of the African
economy in 2050 could be larger than that of China in 2010,
with worrisome implications for greenhouse gas emissions.
Well before then, increased population pressure could resultin significant resource constraints, such as competition forland and water from municipal and industrial uses that
could undermine growth opportunities.

Although this growth in population, especially of theworking-age population, offers Africa a great economic

Figure 2: Medium Variant Population Projections
2.5

Millions
China

India

Africa

2.0

1.5

1.0

0.5

0

2010

2015

2020

2025

2030

2035

2040

Source: African Development Report 2012 team, based on United Nations Population Division data.

6

African Development Report 2012 – Towards Green Growth in Africa

2045

2050

The Role of Green Growth
in Promoting More
Sustainable Growth andDevelopment Options

3
Chapter

Pursuing green growth pathways will entail African countries making “smart” investments
now, focusing on activities necessary to sustain Africa´s progress. These include investingin sustainable infrastructure, energy and urban settlements; better management of natural resources including land, fish stocks, water and forests; building resilience to natural
disasters and climate change; and enhancing food security.
African Development Report 2012 – Towards Green Growth in Africa

73	The Role of Green Growth
in Promoting More Sustainable
Growth and Development Options

Africa is still the poorest continent in the world. The
chronic hunger rate remains the highest in the world;
the percentage of the population with access to electricity
is the lowest in the world. Therefore, reducing poverty
and improving the prospects of African livelihoods remain absolute priorities. Fortunately, some green growth
practices and technologies not only promote sustainablegrowth but also meet short-run development needs. But
the evidence also indicates that there can be a tradeoff
between green growth solutions and meeting immediate socioeconomic needs. For example, deforestation isoften the consequence of an increase in exports of forest
products, growth in agriculture, and households’ use ofaffordable wood fuels. Similarly, countries endowed withcheap fossil fuel may find it hard to pursue green growth
pathways based on technology that is more costly. The
challenge facing the continent, then, is to ensure thatnear-term development needs are met, while attaining adevelopment trajectory that does not jeopardize sustainability and economic growth prospects over the longer
term. The following sub-sections discuss the role andbenefits of green practices and technologies for natural
resources and the energy sector.

3.1	Getting the Most out of Renewable
Natural Resources Endowments
The majority of Africa’s poor depend heavily on natural
resources for their livelihoods. As noted earlier, the agriculture sector is responsible for about 60 percent of Africa’s
total population and contributes a third of Africa’s GDP.
The total number of households relying on traditional

8

African Development Report 2012 – Towards Green Growth in Africa

biomass for fuel is predicted to increase in absolute numbers, from 657 million in 2009 to 922 million in 2030
(OECD and IEA, 2010). Agricultural productivity andthe availability of traditional energy sources depend on
the state of natural resources, including land, water andforests. Therefore, continued use of natural resources tosatisfy these needs inevitably requires that resources aremanaged in a sustainable way. In what follows, we briefly
present evidence on the role of green solutions in achieving
the sustainable management of such resources.

Agriculture, Forestry and Sustainable
Land Management
The agricultural sector in Africa has experienced stagnation during the last half-century. In areas where output
has increased, much of it has come through increasing thearea under cultivation and not from higher productivity(Bluffstone and Köhlin, 2011). In addition, there are concerns that agricultural intensification and reduced genetic
diversity may be contributing to low and declining yields(Rosegrant and Livernash, 1996).
There is evidence that green agricultural practices canreverse the continent’s declining agricultural productivity.
A recent study (UNEP, 2011) found that practices such as
integrated pest management, integrated nutrient management, low-tillage farming, agroforestry, aquaculture, water
harvesting and livestock integration could increase average
yields by as much as 79 percent. Similarly, an analysis oforganic or near-organic practices of 114 projects in 24 African countries found that yields had more than doubled
where the practices have been introduced (UNCTAD and
UNEP, 2008). Moreover, because agricultural growth ismore pro-poor than that of other sectors (World Bank,
2007), increasing agricultural yields is likely to be particularly helpful in reducing poverty and narrowing income
disparities. For example, an impact assessment study in
Burkina Faso found that conversion to organic farming
resulted in improved farmers’ incomes, food security andoverall livelihoods (Pineau, 2009), while an Ethiopian study
found evidence of increased household income and environmental improvement due to green agricultural practices(Kassie et al., 2009).
Some countries, however, have improved food security
through strategies that include chemical inputs. Ghana,for example, reduced its Global Hunger Index score by 59
percent between 1990 and 2011 by combining investments
in agriculture (provision of information and inputs such as
pesticides and fertilizer) with improvements in infrastructure, rural development, education, and health (Kufuor,2011). It is also noteworthy that a recent study examining
relative yield performance of organic and conventionalfarming systems globally found that the yield differences
depend largely on system and site specific characteristics(Seufert et al., 2012). Increasing agricultural productionin Africa on a sustainable basis requires a diverse toolkit
including both green and conventional practices – withthe clear target of preserving the natural systems on whichfood security depends.
Forests are an important source for food security, fuel, andincome for the population living nearby. For example, it has
been estimated that about 70 percent of African households
use wood fuels (fuel wood and charcoal) for cooking andheating, while forests act as safety nets for many rural households, providing food and income earning opportunities(Somorin, 2010).
Besides providing direct benefits, Africa’s forests provide
services beyond the boundaries of the continent. Forests
sequester carbon dioxide, both in biomass (roots, stems,
branches, and leaves) and in soil (Beedlow et al., 2004).
Roughly 2.2 to 9.5 tons of carbon dioxide could be captured
by a forest area of an acre (Birdsey, 1996). It thus makes
policy sense to pay farmers or landowners in exchange forgreen solutions such as enhancing forest stocks or reducing

the loss of forest biomass. International initiatives such as
Reducing Emissions from Deforestation and Degradation(REDD) or the Clean Development Mechanism (CDM)
have provided funds to African countries to offer economic
incentives for farmers or landowners in exchange for taking
on these green solutions.
Perhaps more so than with other natural capital, there is atradeoff between the green solutions presented above andimmediate economic and social needs. Decreasing therate of deforestation can come at the expense of exports,
growth in agriculture, and access to affordable fuels. For
example, central and ­southern Africa’s dry Miombo forests
provide charcoal for an estimated 25 million urban people(Campbell et al., 2007). Policy makers must weigh thebenefits ­associated with sustainable forest management
against the opportunity cost of the loss of economic andsocial opportunities associated with forest degradation.

Integrated Water Resource Management
Water is an essential resource for Africa’s development.
Water resources are crucial inputs for agriculture, which isthe biggest user. Because the bulk of the African population
depends on agriculture for its livelihood, increased watersupply could enhance food security, reduce poverty and increase economic growth. According to available data in theWorld Bank World Development Indicators database, theagriculture sector accounts for 85 percent of total African
annual water withdrawals, with the remainder allocatedbetween domestic use (10 percent) and industrial use (5percent). However, domestic, municipal and industrial
uses of water are increasing due to rising urbanizationand incomes. Africa’s urban population is projected to
grow by about 45 percent between 2010 and 2030, according to the United Nations Human Settlements Program(UN-HABITAT, 2010). Due to increasing competition forwater between agriculture and non-agriculture (municipal
and industrial) uses, water management must be viewed
as an economic, social and political issue encompassing all
sectors of the economy.
Green growth strategies for integrated water resources management include water harvesting (storage and distribution
infrastructure) as well as water governance and institution

African Development Report 2012 – Towards Green Growth in Africa

9building. These strategies manage water availability andsafeguard agricultural production against climate shocks.
Water management in Africa should therefore target efficient water resource utilization, especially in agriculture.
Delivering and applying water to crops more efficiently andincreasing crop yields per liter of water are critical. This isespecially important for the majority of countries on thecontinent, which face severe water scarcity.

water resources at different levels of society.” Options forgovernance include new forms of decentralized institutions
such as basin committees, Catchment Management Agencies, and, at the local level, Water Users’ Associations, aswell as private-public partnerships. It is also likely to entail
a declining financial and technical role for the state/public
sector (Nigigi, 2009; Salami et al, 2011).

Increasing water availability through distribution infrastructure, such as irrigation, may increase agricultural yields.
Irrigation remains relatively underdeveloped in all partsof Africa, besides North Africa and South Africa (Kamara
et al., 2009; You et al., 2011). The continent irrigates only
about 6 percent of its collective cropland, which is less thana third of the world’s average (Svendsen et al., 2009; Salami
et al., 2010). This is despite the fact that irrigation could raise
productivity by at least 50 percent. However, the example ofNorth Africa also shows how extensive irrigation practices
can lead to an unsustainable use of water resources. Irrigation should be used to increase water availability, and not toover-use water resources that are already scarce in Africa.

Total fish production in Africa is estimated at around 7.6m
tons per year, which amounts to around 8 percent of total
global fish landings. Besides providing jobs for about 10
million people in SSA (Markwei et al., 2008), fish supplies
around 17 percent of the animal protein consumed in Africa, and is particularly important where livestock is scarce(Tidwell and Allan, 2001). Small-scale capture fisheries1
employ fishing methods that have a relatively small carbon footprint. Fisheries management may also have direct
spillovers for other natural resources. For example, wildlife
might be overexploited as an alternative source of protein
if fish were not available (Brashares et al., 2004). Moreover,by providing an important alternative protein source and apro-poor livelihood option, the fishery sector can reducepressure on land for agriculture.

In extensive drought-prone areas of southeastern, easternand northern Africa, where the average rainfall is less than
1,000 mm per annum, groundwater is crucial in supporting
village subsistence-level cropping and water supply for local
industries. Public investment and development assistance
are required to develop the skills and infrastructure needed
to develop and maintain groundwater systems. By contrast,
areas that receive large volumes of rainfall and depend on
rain-fed agriculture have to develop the required water
storage infrastructure for irrigation, as well as for watersupply, hydropower, and flood control. Currently, countries
in SSA store only 4 percent of their annual renewable flows,
compared to between 70 and 90 percent in industrializedcountries (WWAP, 2009).
In addition to water infrastructure, appropriate water
governance is essential for sustainable, equitable and efficient water resource management. According to the United Nations Development Program (UNDP, 2007), water
governance entails “the political, social, economic andadministrative systems put in place to develop and manage

10

African Development Report 2012 – Towards Green Growth in Africa

Fisheries Management

However, most capture fish stocks in Africa have historically been de facto open access, meaning that anyone canfish without regulation, and with little active management.
With increasing levels of fishing effort, and improved fishingtechnology, the offtake (or catch) has exceeded the levels
that allowed the fish species to regenerate, as illustrated by
the declining catch per unit of effort in many capture fisheries within the continent. Moreover, foreign fleets hardly
adhere to quotas (where they exist) and have contributed
to this s­ ituation, especially with regards to offshore fishstocks within the exclusive economic zones (EEZ) of African countries.
Green growth strategies to halt the overfishing problem
include the enforcement of fishing regulations, investment
in fisheries development, and promotion of aquaculture.
Coastal countries in Africa, particularly along the west and1

A capture fishery means that fish are caught in the wild rather than farmed.

southwest of the continent, must improve the enforcementof their fishing regulations. To do this, they must engage
in the international enforcement agenda, particularly withrespect to other countries whose boats are fishing in theirwaters. Furthermore, adequate investments must be madein fisheries development, including stock assessment andmarine reserves. Aquaculture (fish farming) currently accounts for over a third of total fish production worldwide,
but for only 3 percent in SSA. Aquaculture development ininland freshwater and in coastal waters is critical in orderto reduce the pressure on capture fisheries.

3.2	Energy Security, Fossil Fuels andOpportunities for Low-Carbon
Development
Energy security is essential for Africa’s development. Sub-Saharan African countries require “subsistence emissions”
to fulfill their basic human needs (Agarwal and Narain,
1991; Sachs and Someshwar, 2012), which stand in sharp
contrast to the “luxury emissions” that support affluent
lifestyles in developed nations. However, as the size ofAfrica’s economy continues to grow, a delicate balance
has to be sought in prioritizing green growth measuresin the energy sector, recognizing the role that low-costenergy can play in supporting development, while also
seeking to ensure that African economies are sustainable,
efficient and hence competitive in an increasingly carbon
constrained and inter-connected world. This will requirea careful analysis of how African countries use renewable
and non-renewable energy resources.

Fossil Fuels and Fossil Fuel Subsidies

Africa is endowed with large deposits of fossil fuels (oil,gas and coal). According to recent estimates, all but nine
African countries possess proven and/or probable oil and/or gas reserves. As of 2011, the continent accounted forabout 9.5 percent of the global proven oil reserves, while theshare of natural gas stood at 8 percent. Africa’s coal deposits
account for 4 percent of global endowment. (BP, 2012). A
significant amount of the fossil fuel resources produced
in Africa – over 70 percent of crude oil, 55 percent of dry
natural gas, and 23 percent of coal – is exported outside thecontinent (IEA, 2011). These resources generate revenues
in sizable amounts, and attract foreign direct investment(FDI). Between 2000 and 2009, about 75 percent of FDI to
Africa flowed to its oil-producing countries. Yet, despite
these bountiful reserves in many African countries, energy
security remains a big challenge for the continent. In 2008,
only 42 percent of the African population had access toelectricity and by 2040, only two thirds of Africa’s population
will have access to electricity (PIDA, 2011).
African governments are often under great social and political pressure to avoid disseminating oil price shocks to
consumers. For example, Nigeria has recently experienced
popular protests against removal of gasoline subsidies, asinterest groups have come to see subsidies as entitlements.
Thus, in order to improve access to energy for the poor, as
well as foster economic growth, a number of countries inAfrica subsidize fossil fuels. Subsidies stabilize domestic
prices and keep them lower than world market prices,
thereby potentially enhancing the purchasing power ofhouseholds. Fuel subsidies can also slow deforestation bydiscouraging the use of wood fuel and charcoal in cooking
and heating.
On the other hand, there are strong arguments against
subsidies. Critics advocate for removing, or reforming,
the regime of subsidies to make them more efficient. Thisis because oil subsidies increase consumption, resulting
in higher CO2 emissions. They also benefit the rich morethan the poor. Furthermore, subsidies tend to discourage
investments in renewable energy technologies (RETs) anddivert public resources away from priority areas such as
education, healthcare and basic infrastructure investments.
For example, in South Africa, the average fossil fuel subsidy
is 6.4 percent of the market price. Therefore, the removal ofthese subsidies would result in a gain in economic efficiencyof 0.1 percent of GDP and reduce energy consumption andCO2 emissions by 6.3 percent and 8.1 percent, respectively(UNFCCC, 2007).
Although on balance the environmental and efficiency
considerations for reducing or removing subsidies havereceived intellectual support, subsidy reform remains acontentious issue. When such reforms are necessary to foster

African Development Report 2012 – Towards Green Growth in Africa

11

long-term economic growth, governments must put in placeappropriate social safety net programs to protect the mostvulnerable. Indeed, environmental concerns should not takeprecedence over social and economic considerations. The
process of reforming subsidies should begin with an assessment of the impacts of reform, and garner public support
by creating awareness about the reasons for reform and thelong-term benefits to be expected. Implementation requires
transparency and a well-designed sequential approach.

Renewable Energy Technologies (RETs) ­Options
Africa is endowed with tremendous renewable resources. It is estimated that the solar potential alone amounts
to between 155,000 and 170,000 terawatt hours (TWh)per annum, spread broadly across the continent. However the North and West African regions are especiallywell-endowed. The potential for wind energy in Africa isequally substantial, amounting to 5,000-7,000 TWh largely
concentrated in the north and east of the continent. Geothermal potential stands at 1-16 TWh exclusively in theeast of the continent. Africa’s hydro power endowment,
covering central and southern Africa, stands at 1,844 TWh.

In comparison, total energy production in Africa
amounted to 13,584 TWh in 2010 (IEA, 2012). Biomass
offers a further 82-372 exajoules2 of potential, spreadthroughout the continent (although, as discussed below,
there are often serious health and environmental concerns associated with the use of this resource). Table 1
presents information on renewable energy potentials
across African regions.
While RETs are in general still more expensive than fossil
energy technologies, their costs are falling, whilst thosefor fossil energy technologies are increasing. Countries
with energy infrastructure deficits may consider investing
now in RETs to avoid investments in technologies andsystems that would lock them into high carbon pathwaysfor decades into the future (Doig and Adow 2011; Byrne
et al., 2012).
Besides helping to reduce GHG emissions, deploymentof RETs could generate a wide range of benefits in Africa.
RETs are likely to create jobs in the service end of the supply chain, including distribution and sales, installation, andmaintenance. Moreover, the deployment of non-biomass
2 An exajoule is 1018 joules.

Table 1: Renewable Energy Potentials Across African Regions
RegionWind (TWh/yr)

Solar (TWh/yr)

Biomass (EJ/yr)

Geothermal(TWh/yr)

Hydro (TWh/yr)

East

2,000-3,000

30,000

20-74

1-16

578

Central

-

-

49-86

-

1,057

North

3,000-4,000

50,000-60,000

8-15

-

78

South

16

25,000-30,000

3-101

-

26

West

0-7

50,000

2-96

-

105

Total Africa

5,000-7,000

155,000-170,000

82-372

1-16

1,844

Source: IRENA (2011), based on a compilation of various sources.

12

African Development Report 2012 – Towards Green Growth in Africa

RETs can reduce deforestation pressure if they replace
wood and charcoal as sources of energy. This could also
result in the reduction of local pollutants, especially particulates that the use of wood and charcoal creates. Evidenceshows that more than half a million deaths per year in
SSA are attributable to indoor air pollution from thesepractices. This is the highest rate per million in the world(UNDP-WHO, 2009). Thus, reducing particulates could
mean “a saving of 20 million disability adjusted life years(DALYs) from outdoor air pollution and more than 24
million DALYs from household air pollution” (Johansson et al., 2012), compared with just the introduction of
air-quality legislation that is currently planned.
In spite of the attractiveness of RETs, there remain complex
challenges in making a shift from interdependent highcarbon energy systems or traditional biomass technologies
to new low-carbon alternatives. The International Energy
Agency estimates that 80 percent of people in SSA rely
on traditional biomass as their primary source of fuel forcooking (IEA, 2011). Concerted efforts must be made toencourage households to switch to RETs. Policy options
should encourage adoption of cleaner technologies that put

the user at center-stage and employ social norms to change
energy-related cultural practices (Griskevicius et al., 2008).
Providing users with training on how to maintain theirsystems and feedback on cost savings from using such
systems will also yield great benefits. Most importantly,
financial arrangements of more efficient subsidies should
be in place to make the switch economically attractive.
Finally, energy efficiency is an important supplement to
the deployment of RETs for the energy sector to pursue
green growth pathways. This is true on both the demandand supply sides of the energy system. According to Farrell
and Remes (2008), cost-effective energy efficiency measures could reduce projected energy demand by almost 20
percent by 2020 worldwide. This could lower emissions
and expenditures for consumers; for firms, lower energy
costs can translate into increased investment, productivity
and profitability. It could also save governments the costsof energy-supply infrastructure.

African Development Report 2012 – Towards Green Growth in Africa

13Technology Transfer
for Green Growthin Africa

4
Chapter

Africa should go beyond hardware financing for technology transfer and begin toassess its technological needs and appropriate technologies, as well as develop
innovation capacities through knowledge flows. This can be promoted throughClimate Innovation Centers.
14

African Development Report 2012 – Towards Green Growth in Africa

4T echnology Transfer for Green
Growth in Africa

Access to technologies can be an important driver for a
successful green growth strategy. Technology Transfer(TT) can increase land productivity in Africa by facilitating reductions in the use of water, fertilizer, pesticides,
energy and other inputs. It can also improve irrigation andsoil management techniques. In fisheries management,
evolving equipment and techniques can improve stock
assessment as well as the efficiency of finding, harvesting,handling, processing and distributing aquatic resources
and products (FAO, 2012). Agriculture and fisheries areintertwined as sources of food and water security. Therefore, TT focusing these sectors has the potential to tackle
food insecurity and address problems of water scarcity.
The benefits of TT in the forestry sector are immense.
Improved technologies could lead to increased sustainable forest productivity, biodiversity conservation andenhanced profitability from the national level to the levelof the forest stand, and from the perspective of single
forest practices to broader socioeconomic approaches(IPCC 2000, 2007b).
In addition, TT can improve energy access and climate
resilience across Africa. Green, low carbon energy technologies have much to contribute to improving energy
access and security. New technologies can improve energy
generation and increase the efficiency of consumption.
Other areas where green TT can play a critical role in
Africa include transport infrastructure development, as
well as rural and urban infrastructure planning.
Yet, to date, TT policy in Africa has failed to achieve thescale or pace required to deliver significant development
benefits, or to address global climate change. The principal focus has been on providing additional funding toincentivize investment in green technological hardware
in developing countries, such as the provision of carbon
credits under the Clean Development Mechanism. This
has resulted in a low level of technology diffusion acrossthe region. A revised understanding of TT is therefore
necessary to change this.
There are three key conditions necessary for Africa to takefull advantage of TT in order to achieve long term green
growth and human development:»» Domestic innovation capacities should be built andsupported. Africa must begin to assess its technological needs, as well as develop innovation capacities
through knowledge flows. The significant variationsin technology needs across nations and the multiple
context-specific considerations necessitate different
and appropriate interventions, as illustrated in Figure
3. If efforts are made to develop innovation capacities and related systems across African nations, green
technology transfer could lead to green growth on asignificant scale (UNCTAD, 2007). This can be facilitated by nationally located Climate Innovation Center,building on in-depth, stakeholder led assessments ineach country and region.
»» I ntellectual Property Rights (IPRs) have been observed
to prevent green TT to Africa. Several firms regularly
express concerns that IPRs might act as a barrier in
attempting to reach the technological frontier of certain technologies. This is the case, say, for thin film
solar photovoltaic technologies. Without access to
IPRs, firms in developing countries are unable to adopt
and work with these technologies. A policy option forclimate technologies is to make funds available to buy

African Development Report 2012 – Towards Green Growth in Africa

15

up IPRs and make them publicly available. However,access to IPRs is unlikely to be successful unless accompanied by strategic attention to facilitating tacitknowledge flows, education, training, international
exchanges, and efforts to connect all players in thevalue chain.

»» G reater public support for TT is also required to ensurethat green technologies yield benefits to society, notfully captured by the market.

Figure 3: Qualitatively Different Flows of Hardware and Knowledge in the Technology
Transfer Process and their Contribution to Different Types of New Capacity

TECHNOLOGYSUPPLIERSTECHNOLOGY
TRANSFERREDTECHNOLOGYIMPORTERSSUPPLIER FIRMS’ENGINEERING,MANAGERIAL ANDOTHERTECHNOLOGICALCAPACITIESCapital Goods

CREATION OF NEW

Engineering Services

PRODUCTIONCAPACITY

Flow AManagerial Services
Product Designs

Flow B

Still and Knowledge forOperations and Maintenance(Know How)

Flow C

Knowledge, Expertise andExperience for Generating andManaging Technical Change(Know Why)

Source: Adapted from Bell (1990).

16African Development Report 2012 – Towards Green Growth in Africa

ACCUMULATION OF
INNOVATIONCAPACITIESFinancing Green
Growth in Africa

5Chapter

Financing the initial stages of the transitioning process togreen growth will require ambitious policies, market incentive
structures and regulatory frameworks.
African Development Report 2012 – Towards Green Growth in Africa

17

5

Financing Green Growth in Africa

Financial resources are necessary for successful implementation of green growth strategies. At the global scale,for example, the estimated annual financing requirement
for green growth is estimated to be between US$ 1.05 trillion and US$ 2.59 trillion between 2011 and 2050 (UNEP,
2011). Nevertheless, the question of how much it will cost
to “green” global growth pathways should be accompaniedby the reverse question: what will it cost the global economy if it continues with Business As Usual? Here, estimatessuggest that the cost of the latter (inaction) is ultimately
higher than the former, at least in the medium to long term.
Within the broader scope of green growth, climate change
impacts illustrate that the cost of inaction may ultimately
be larger than the cost of action. The Stern Review estimated the annual cost of reducing emissions to avoid
the most adverse consequences of climate change to bearound 1 percent of global GDP. This would mean pursuing lower-carbon development pathways and stabilizing
greenhouse gas concentrations in the atmosphere at alevel which would limit global warming to about 2˚C. By
contrast, Business As Usual and the associated impacts
from unabated climate change, such as declining agricultural production, heat waves, droughts, floods and otherextremes, are estimated to cost 5-20 percent of global
GDP per year. Depending on the social discount rate, thisestimate suggests that the cost of inaction may be higher
than the cost of action by a factor of between 5 and 20.
The amount required for green growth calls for the need to
explore several financing options. For African countries,
there are several strategies to finance green growth. These
include (i) optimizing resource efficiency and productivity gains in priority sectors; (ii) reducing the fiscal costof subsidies through realignment; (iii) leveraging global

18

African Development Report 2012 – Towards Green Growth in Africa

financing options for green growth, (iv) building targeted
public-private partnerships, and (v) harnessing other fiscal
and environmental policy tools.
»» Optimizing Resource Efficiency and Productivity Gainsby Greening Value Chains: Given the huge inefficiencies in the existing infrastructure in less developed
countries, there are many options to improve resource
efficiency and productivity, especially in Africa. For
example, global investments of around US$ 90 billion
in promoting energy efficiency in developing countries could provide US$ 600 billion in net savings(McKinsey and Company, 2010). Similarly, over US$
18 billion worth of water a year globally is considered
non-revenue water (NRW) – as a result of leakage,illegal connections and dysfunctional meters. In dysfunctional domestic water supply systems, NRW canrange from 15 percent to more than 70 percent. Thisis particularly significant in a context where water
demand outstrips current forms of supply, and global
government expenditure for upstream water supply at
the global scale could increase from the current US$
40 to 45 billion per annum to around US$ 200 billion
per annum by 2030, excluding distribution costs.
»» Reducing the fiscal cost of subsidies through r­ ealignment:
As discussed above, this is another financing option
which could be explored by African countries. In
2010-11, over half of all African countries had somesubsidy in place for fuel products, and these subsidies
consumed, on average, 1.4 percent of GDP in publicresources. Of the 25 countries with fuel subsidies, thefiscal cost of subsidies in six countries—primarily oil
exporters—was at or above 2 percent of GDP in 2011
(World Bank, 2012a).

»» Leveraging global financing options for green growth: In
addition to Foreign Direct Investments (FDI), there
are significant opportunities for countries to accesscomplementary finance for climate change adaptation and mitigation, biodiversity conservation, andother issues of environmental sustainability. Available
finance through all these mechanisms has increased
during the past decade, and will continue to increasein the near future.
»» Building targeted public-private partnerships: Private
sector financing will be essential in transitioning togreen growth. With foreign direct investment increasingly exceeding Official Development Assistance(ODA) on the African continent, governments willneed to provide the right enabling and regulatoryenvironment for the private sector to invest in green
projects in priority sectors, depending on the comparative and competitive advantages of countries.
»» Harnessing other fiscal and environmental policy tools:
Fiscal and environmental policy tools are probably themost immediate financing mechanisms available tocountries. These might include green taxation, green
procurement, green bonds, micro-credit, weather index
insurance, valuation/payments for ecosystem services,
etc., in order to help promote resource efficiency andsustainable livelihoods. For African countries, it isimportant to strengthen the capacities of countries
to monitor their natural resource base and assess thecost of environmental degradation and pollution inorder to be able to make informed decisions about
environmental regulations and taxation. The early
involvement of the Ministries of Finance and Planningis key in order to ensure that green growth concerns
are also integrated into national budgeting processes
and adequate resources are mobilized.
Overall, green growth offers huge potential opportunities
for self-financing through efficiency and productivity
gains. However, financing the initial stages of the transition
to green growth will require ambitious policies, market
incentive structures and regulatory frameworks to realize
opportunities. Specific tools include realigning costly
subsidies; internalizing externalities of growth throughpayments for ecosystem services and other fiscal policy
measures; leveraging traditional financing mechanisms(including FDI and ODA); and making use of emerging
global funds for climate change, biodiversity and environmental sustainability.

African Development Report 2012 – Towards Green Growth in Africa

19Creating an ­Enabling
Environmentfor Green Growth6
Chapter20

The African Bank of Development, together with other multi-lateral and bilateral organizations,can facilitate the transition to green growth in Africa by building awareness, knowledge sharing
and upstream technical support, as well as providing guidance and resources for programmaticand project specific interventions. In addition to its operational experience, the Bank can help
provide building blocks for promoting green growth and hence function as a partner to its
member countries in the transition towards sustainable development.
African Development Report 2012 – Towards Green Growth in Africa

6 reating an E­ nabling EnvironmentC
for Green Growth

The previous sections have described characteristics ofAfrica’s economic progress, discussed development gains
and shortfalls, and outlined key development trends thatneed to be managed over the near to long-term. It has also
discussed the key economic sectors and explored the roleof technology and financing instruments for promoting
sustainable development pathways. Achieving the transition towards growth that is both inclusive and increasingly
green will take time and great effort. It also requires theright enabling environment, policies, institutional structures, technical capacities and incentive mechanisms.
Africa has a tremendous opportunity to make significant
development gains in the 21st century. But such ­progress
can only be achieved and sustained if the continent­prepares for and simultaneously adapts to e­ nvironmental
and socioeconomic changes it is currently confronted with.
In order to master the more complex challenges of thiscentury, more cross-sectoral analysis and collaborationis required.
There are critical entry points for systematic promotionof green growth and the AfDB and other development
organizations can facilitate this transition.

Entry Points for Green Growth
There are several levers for promoting green growth andenabling the transition towards greener economies inAfrica. The most strategic of these is the progressive mainstreaming of green growth into upstream development
planning and ensuring that the right institutional enabling
environment is put in place. Key entry points for mainstreaming green growth are the national development
planning cycles.

National Development Plans and Poverty Reduction
Strategy Papers set development priorities for a country and hence determine investment priorities. Specificdevelopment objectives, such as increasing agricultural
productivity and energy access, can be realized througha number of alternative approaches. Emphasizing green
growth means carrying out appropriate upstream diagnostics to determine which of these approaches are mostappropriate for a particular country from an economic,
social and environmental perspective. Smaller levers forgreen growth are further downstream and focus on integrating principles of resource use efficiency, sustainability
and resilience into the design of development programs
and projects.
Strengthened upstream and systematic planning also
requires a broader integration of sectors. The need for ahigh-level political commitment coupled with long-term
development visions and more integrated and programmatic development approaches (AfDB and OECD, 2013).
Improved diagnostic, information and monitoring capabilities are important for adequately capturing a country’s natural resource wealth, assessing risks to sustainability andmonitoring progress. Only when development progress isdefined and monitored along appropriate economic, socialand environmental criteria will it be possible to assess thequality of growth in terms of sustainability.
Strengthened upstream and systematic planning also
requires a broader integration of sectors. The need forhigh-level political commitment coupled with long-term
development visions and more integrated and programmatic development approaches are particularly essential(AfDB and OECD, 2013). Improved information andmonitoring capabilities are also important to adequately
capture a country’s natural resource wealth, assess risks

African Development Report 2012 – Towards Green Growth in Africa

21

to sustainability and monitor progress. Only when development progress is defined and monitored along appropriate economic, social and environmental criteria will
it be possible to assess the quality of growth in terms ofsustainability.
Many of the building blocks for green growth are already inplace, but not systematically integrated into development
planning and implementation. Thus, a more systematic
application of Strategic Environmental Assessments canhelp in assessing development options in their impact
on natural assets. Integrated planning tools such as theThreshold 21 model can further strengthen the evaluation of development pathways in terms of synergies andtradeoffs between economic, social, and environmental
objectives. Other tools offer opportunities to identify
likely cost-effective entry points for specific thematic
areas, such as options for low-carbon development. For
example, greenhouse gas abatement cost curves help in theidentification of the least cost mitigation options withinor across development sectors, and were an integral component of Ethiopia’s green growth strategy (GoE, 2011).
In addition to guiding broader strategy development,
there is a range of tools that help to identify opportunities
for efficiency gains, promote sustainability and minimize
vulnerabilities. These tools can complement social andenvironmental safeguards by operating farther upstream
and helping to optimize project design early on in the
project cycle. In the natural resource management context,
sustainable land and integrated water management represent cross-disciplinary approaches, which seek to generate
development objectives across multiple sectors and linkbroader policy level interventions with project specificmeasures. Climate Risk Screening Tools, developed by
the AfDB and other organizations, can help in identifying
climate-related vulnerabilities of projects and provide earlyguidance on possible risk mitigating measures.
Green growth strategies, which are necessary to addressthese challenges, provide concrete policy frameworks
on how economic development and environmental sustainability can reinforce each other and create a win-win

22

African Development Report 2012 – Towards Green Growth in Africasynergy to overcome the tradeoffs associated with green
growth (Girouard, 2011).
A number of conditions and additional reforms should
accompany green policies to set the stage for green growth.
These include, inter alia, making appropriate land reforms
and policies, public investment in green growth, andstrengthening transparency and good governance.
Land reforms are necessary for the continent to benefit
from implementing the green growth agenda. In recent
years, there is evidence of fierce competition for landand very high pressures on tenure systems in Africa. In
a number of countries in eastern and southern Africa,
for example, cultivated land per capita has halved overthe last generation. Land reforms can encourage farmers
to invest in soil conservation, to use land as collateral toobtain credit to improve land productivity, and to adopt
new agricultural technologies.
Public investment in capacity building efforts is criticalin contributing to greener growth by reducing investment costs for private companies. The public sector canhelp improve the skills and competence of the workforce
needed to support green growth, including research anddevelopment , skills for development of low-carbon, climate-resilient technologies, as well as the skills necessary
to construct, manufacture, install and maintain thesesystems (Corfee-Morlot et al., 2012).
Furthermore, public investment in infrastructure development has to be based on a framework for green infrastructure – which is the ecological framework needed forenvironmental, social and economic sustainability (World
Bank, 2012b). Africa has a huge infrastructure deficit
and this presents an opportunity to carefully consider
the tradeoffs between “building right” (which relates toeconomic plus environmental concerns) and “buildingmore” (which relates to satisfying social needs). Moreover,future climate conditions are to some extent uncertain,
and this may adversely impact less-resilient infrastructure.

Finally, Africa needs to strengthen transparency and good
governance in order to effectively pursue green growth.
Relative to advanced regions, African countries are lessdemocratic and have more corrupt formal institutions.
Studies have found that countries with stronger institutional, legal, and political capacities tend to be more developed
economically (Kuncic, 2012). Weak institutions breed
corruption and rent-seeking behavior, leading to mistrustin public policy, inefficiency, and suboptimal managementof natural and reproducible capital, including public infrastructure. In this context, all resource-rich Africancountries are encouraged to sign into organizations suchas the Extractive Industries Transparency Initiative that
promote and support transparency, improved governanceand increasing scrutiny over government revenues.

The African Development Bank
In partnership with other multi-lateral and bilateral organizations, the AfDB can facilitate the transition to green
growth in Africa. This includes facilitating awareness,knowledge sharing, and upstream technical support as wellas providing guidance and resources for programmaticand project-specific interventions.
While there may be efficiency gains and cost savings associated with green growth, there are likely to be upfront
investment costs, which could constrain the transition.
In addition to its traditional financing instruments, the
AfDB is managing or hosting a range of innovative financing instruments that may help to overcome thesefinancial barriers.
For example, through the Climate Investment Funds andthe Sustainable Energy Fund for Africa, the Bank has
several funding instruments that help mainstream climate mitigation and adaptation issues into development
activities and promote scaling up of clean energy solutions
at different levels. The Bank is also helping to channel resources from the Global Environmental Facility to addressa range of environmental issues in Africa. Through the
Africa Water Facility, the Bank is providing support for
managing essential resources more sustainably.

For example, through the Climate Investment Funds andthe Sustainable Energy Fund for Africa, the Bank has
several funding instruments that help mainstream climate
mitigation and adaptation issues into development activities and promote scaling up of clean energy solutions at
different levels. The AfDB is also helping to channel resources from the Global Environmental Facility to addressa range of environmental issues in Africa. Through the
Africa Water Facility, the AfDB is providing support for
managing essential resources more sustainably.
With the increasing volume of foreign direct investment,
the engagement of the private sector in promoting green
growth will become even more critical. Thus, the Bank’s
private sector arm can help strengthen the countries’ investment climate for green technologies. Equally, the Bank
can help regional member countries foster and strengthen
Public-Private Partnerships, which can be mainstreamed
to reduce the risk private sector actors face in investingin new, green technologies.
Through its operational experience, the Bank alreadyhas a number of building blocks for promoting green
growth and can hence function as a partner to its member countries in the transition towards more sustainable development pathways. However, this is the starting
point which requires adjustments over time and mutual
learning by development partners and client countries. In
addition to strengthening awareness and knowledge foundations, there is need for more concerted action by development actors to enable such programmatic approaches.
This requires collaboration across sectors, departments,
ministries and institutions. Developing more integrated
solutions requires awareness and willingness among all
involved development partners. The current fragmentationof resources and funding instruments will also require
refining. Not all of these changes can be achieved at once,but the time to start is now.

African Development Report 2012 – Towards Green Growth in Africa

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Green growth in Africa encompasses the achievement of critical development objectives while seeking
to maximize efficient use of natural resources, minimize waste and pollution, and enhance the resilience of
livelihoods. Seeking such a delicate balance is crucial because, as the size of Africa’s economy continues togrow, natural resource degradation and the global GHG problem may increase, eventually putting a brake on
the region’s progress. This could have serious implications for livelihoods.
Pursuing green growth pathways will entail African countries making “smart” investments now, focusing on
activities necessary to sustain Africa´s progress. These include investing in sustainable infrastructure, energy andurban settlements; better management of natural resources including land, fish stocks, water and forests; building
resilience to natural disasters and climate change; and enhancing food security.
The largest and most systematic lever for promoting green growth is the progressive mainstreaming of green
growth into upstream development planning and ensuring that the right institutional environment is put in place.
Smaller levers for green growth are further downstream, focusing on integrating principles of efficient use ofresources, sustainability and resilience into the design of development programs.
The AfDB, together with other multi-lateral and bilateral organizations, can facilitate the transition to green
growth in Africa by building awareness, knowledge sharing and upstream technical support, as well as providing
guidance and resources for programmatic and project specific interventions. In addition to its operational
experience, the Bank can help provide building blocks for promoting green growth and hence function as apartner to its member countries in the transition towards sustainable development.

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