Africa’s new climate economy: economic transformation and social and environmental change

Working and discussion papers
November 2016
Milan Brahmbhatt, Russell Bishop, Xiao Zhao, Alberto Lemma, Ilmi Granoff, Nick Godfrey and Dirk Willem te Velde
Busy street in Kampala. Credit: Flickr/James Anderson

Africa’s 'growth miracle' in the 21st century has reversed a long-standing narrative of pessimism about the region. It has emboldened hope for the future. GDP growth reached around 5% annually from 2001-2014. Rates of extreme poverty fell substantially.

Yet big challenges remain. Growth slumped in 2015 and 2016. The region lags far behind on most measures of human development. Climate change is also taking an increasing toll on many countries: the region is warming faster than the world as a whole, and many areas will experience more frequent and intense droughts and floods. The economic impacts of climate change are expected to be severe, with agriculture and poor people especially at risk.

In this uncertain environment, policymakers in African countries and pan-African institutions – the African Union in its 'Agenda 2063', the African Development Bank and the United Nations Economic Commission for Africa – have identified economic transformation as a critical strategy to help boost the pace of inclusive growth in decades to come.

This report aims to help decision-makers take stock of the extraordinarily rich experience of recent years and draw lessons for the future. The choices made now will have implications for the decades ahead. This report lays out five key action areas for economic transformation and social and environmental progress in Africa:

  • getting the fundamentals right;
  • transforming agriculture and land use;
  • diversifying into manufacturing and other high-productivity sectors;
  • unleashing the power of urbanisation; and
  • fostering a modern energy transition.