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Publication | 7 October 2021

Climate Change Adaptation and Economic Transformation in Sub-Saharan Africa

Global Food and Nutrition Security

While the global economy continues its rapid recovery from the global recession of 2020, inequities in vaccine supply and access to external finance are leading to a two-track recovery.

Sub-Saharan Africa exits recession in 2021, but recovery is still timid and fragile.

In Sub-Saharan Africa, the economy is set to expand by 3 .3 percent in 2021, one percentage point higher than the forecast of the April 2021 Africa’s Pulse, with projections for 2022 and 2023 just below 4 percent.

Economic recovery in Sub-Saharan Africa remains timid and fragile as the slow pace of vaccination continues to expose the region to emerging strains of coronavirus, holding back economic performance.

Growth in economic activity for the region is projected at 3 .5 percent in 2022 and 3 .8 percent in 2023 . However, these projections are subject to substantial uncertainty around the pace of vaccination.

Within Africa, recovery is also multi-speed.

Excluding South Africa and Nigeria, the rest of Sub-Saharan Africa is rebounding faster, with a growth rate of 3 .6 percent in 2021.

Public debt levels across Sub-Saharan African countries experienced a steep increase, a trend that predated the COVID-19 crisis.

Inflation picked up on the back of rising food and fuel prices.

The risk on the outlook is tilted to the downside.

Sub-Saharan Africa is reforming; what is most needed to boost and sustain economic recovery is financing.

African countries have seized the opportunity of the crisis to foster structural and macroeconomic reforms.

Inflation rates have remained relatively under control across countries in the region.

A number of countries have embarked on “hard to do” and “hard to sell” structural reforms.

Because of limited fiscal space but also fiscal discipline, African countries have not been able to inject the level of resources required to launch a vigorous policy response to COVID-19.

Accelerating the economic recovery in Sub-Saharan Africa requires significant additional financing.

The recent allocation of Special Drawing Rights (SDRs) to African countries is a good shot in the arm but it might not be sufficient.

Sub-Saharan Africa can seize the climate opportunity to adapt and transform its economy.

Confronted with mounting fiscal pressures, African countries still need long-term support to recover and address the key structural issues they face—with climate change adding to the region’s already daunting challenges.

Policies to foster sustainable and inclusive growth cannot be divorced from the climate crisis—for which Africa bears the least responsibility but the largest brunt.

The costs of climate change can be significant.

And the cost of inaction is even higher.

Climate change amplifies the frequency and impacts of shocks that disproportionately affect the poorest households, with long-term impact on human capital. In response to shocks, the poor are often forced to resort to a wide array of damaging coping strategies that undermine human capital formation and thus perpetuate the cycle of poverty and vulnerability. This is illustrated by evidence from the Sahel where one in four households is vulnerable to repeated climate shocks. In the absence of effective social protection programs, extreme weather events (droughts and floods) can contribute to maternal and child malnutrition by leading to reductions in food intake, trigger decisions to take children out of school, or lead poor households to sell productive assets, thereby perpetuating and deepening inequalities.

Climate impacts on the poor include loss of lives and livelihoods, damage to essential infrastructure and disruption of services, poor health and malnutrition, conflict, and an escalation of distress-driven migration.

Social protection systems in Sub-Saharan Africa can be leveraged to become more adaptive, to enhance household resilience to climate shocks and stresses.

Adverse climate shocks (rising temperatures and extreme weather events) have lowered agricultural incomes and productivity and can potentially lead to a sectoral reallocation process with limited growth gains.

Addressing climate change requires bold actions and massive investments across key economic sectors.

Climate change may be an opportunity for structural change and job creation.

Africa’s unique context—of low baseline development, preexisting climate vulnerabilities, limited energy access, and high reliance on climate-sensitive sectors—poses challenges but also provides opportunities to build back better and greener.

Achieving universal access to energy is critical to attain the region’s long-term sustainable development goals.

In a region where much of the infrastructure, cities, and transportation systems are yet to be built, investments in climate-smart infrastructure can help cities create jobs.

Adopting technological advances, best practices, and new business models can help enhance the sustainability of agriculture. Technological developments such as weather forecasts, soil sensors, and high-resolution aerial imagery are helping crop management in real time. Adoption of modern agricultural practices (for example, new seed varieties, fertilizers, irrigation, and machinery) contributes to strengthening the food production and distribution system. Financial solutions are evolving (including mobile money and digital loan options) to connect smallholder farmers with financial institutions and provide greater market access. In this context, governments, investors, and international organizations are essential to establish localized agricultural planning and facilitate access to credit and digital tools.

Land policies are powerful levers for reducing greenhouse gas emissions and strengthening resilience to climate change.

The land use sector has potential to reduce emissions, sequester carbon, and increase human and biophysical resilience. Sustainable land management and restoration often provide positive and lasting contributions toward societal well-being and sustainability—including multiple benefits such as job creation, disaster risk reduction, climate change mitigation, and adaptation for current and future generations. Land issues and policies are key considerations for adaptation planning, to strengthen land tenure and management arrangements in at-risk environments. Secure land rights, provided on an individual or community basis, are likely to increase people’s incentives to invest in and take advantage of adaptation strategies.

Countries with a high share of carbon and carbon-linked wealth are highly exposed to carbon risk and need to avoid policies and investments that might elevate their exposure.

Diversifying exports away from non-renewable energy commodities has proven challenging for resource-abundant economies.

The transition to a low-carbon economy would lead to changes in the existing product space of countries across the world—including in Sub-Saharan Africa.

The transition to a low-carbon economy would lead to net job creation worldwide—and these green jobs will be characterized by higher levels of non-routine cognitive skills and higher dependence on formal education, work experience, and on-the-job training.

In Sub-Saharan Africa, creating jobs for more than 12 million people entering the job market every year will require not only green jobs, but also brown jobs.

Financing climate change adaptation in Sub-Saharan Africa is essential, and policies to mobilize resources are critical to create more, better, and sustainable jobs.