Dubai, December 6, 2023 — Dr. Akinwumi Adesina, President of the African Development Bank Group, has cautioned that the proposed EU carbon border tax might impede Africa’s trade and industrialization progress.
He highlighted the potential impact on key exports such as steel, cement, iron, aluminum, and fertilizers, emphasizing that Africa, already facing an energy deficit, could be compelled to export raw commodities, further exacerbating de-industrialization.
Adesina projected a potential annual loss of up to $25 billion due to the EU Carbon Border Tax Adjustment Mechanism, expressing concern that Africa, already marginalized in global trade, could face additional challenges.
He advocated for Just Trade-for-Energy Transition policies to balance Africa’s renewable energy ambitions with trade considerations, stressing the importance of utilizing natural gas as a transitional fuel.
Addressing the Sustainable Trade Africa Conference in Dubai, Adesina underscored Africa’s reliance on intra-regional exchanges for trade opportunities, pointing to the Africa Continental Free Trade Area’s potential to boost intra-Africa exports by over 80% by 2035.
Contrary to common perceptions, Walid Mohammed Hareb Alfalahi, CEO of the UAE Trade Centre, regarded Africa as a promising investment frontier, citing positive experiences from various projects.
Adesina supported this view, citing a Moody’s Analytics report indicating Africa’s lower default rate on infrastructure investment compared to other regions.
Adesina highlighted mega projects attracting investor interest through the Africa Investment Forum, including Mozambique’s $24 billion liquefied gas project, the $15.2 billion Abidjan to Lagos Highway corridor, and the $3.6 billion Tanzania to Burundi and DR Congo railway line.
He emphasized Africa’s capability to handle diverse projects in collaboration with partners.
Additionally, Professor Benedict Oramah, President of Afreximbank, warned of a potential $150 billion reduction in merchandise exports from fossil fuel-exporting countries in Africa due to rapid decarbonization, as revealed by a commissioned study.
The conference, moderated by Dr. Victor Oladokun, Senior Adviser for Communication to the African Development Bank President, provided insights from key figures, reinforcing the narrative of Africa’s untapped potential despite existing challenges.
