President of the African Development Bank Group, Akinwumi Adesina, has warned that the proposed EU carbon border tax could result in an annual loss of $25 billion for Africa, seriously impeding the continent’s trade and impeding industrialization progress
In October, the EU launched the first phase of the world’s first system to impose CO2 emissions tariffs on imported steel, cement and other goods as it tries to stop more polluting foreign products from undermining its green transition.
What the AfDB president said:
“With Africa’s energy deficit and reliance mainly on fossil fuels, especially diesel, the implication is that Africa will be forced to export raw commodities again into Europe, which will further cause de-industrialisation of Africa.”
“Africa could lose up to $25 billion per annum as a direct result of the EU Carbon Border Tax Adjustment Mechanism,” the Bank President told delegates at the Sustainable Trade Africa Conference held at the UAE Trade Centre in Dubai.
He stressed that Africa has already been disadvantaged by climate change and is now at risk of being short-changed in global trade.
“Because of weak integration into global value chains, Africa’s best trade opportunity lies in intra-regional exchanges, with the new Africa Continental Free Trade Area estimated to increase intra-Africa exports over 80% by 2035.”
Adesina emphasized that Africa is currently being marginalized in the global energy transition, as indicated by data from the International Renewable Energy Agency.
“Africa received just $60 billion or 2% of the $3 trillion of global investments in renewable energy in the past two decades, a trend that will now impact negatively on its ability to export competitively into Europe,” said Adesina as he called for what he termed Just Trade-for-Energy Transition (JTET) policies, which would allow Africa to pursue its renewable ambitions without limiting its trade prospects.
Source: BI
