As your article on the historic drought in the Horn of Africa points out (“Delayed rain and conflict leave Horn of Africa at risk of famine”, Report, May 4), the impact of climate change is not in years, but already severely affecting economies and livelihoods.
Africa contributed only 3.8% to global greenhouse gas emissions, but is bearing the full brunt of the effects of global warming, compounded by a looming debt crisis and the pandemic.
Rising temperatures and droughts will not only affect economic stability, but also other dimensions of well-being, including food supply shocks that drive inflation and energy supply shocks due to dependency. to hydroelectricity.
Nominal exchange rates are also depreciating rapidly, increasing the cost of food and fuel imports, which will fuel domestic inflation. Water scarcity will trigger more frequent and intense conflicts among pastoralists, affecting the food security of millions of people across the continent.
Our research on the macroeconomic impacts of climate change on Africa shows that some countries, such as Ethiopia, could experience a drop of at least 15% in household incomes, while food prices could rise by more than 50%.
Although the economic outlook looks bleak, there is a way forward. The Covid-19 pandemic can be an opportunity for Africa to launch a recovery driven by green innovation that would not only accelerate growth but also tackle climate change and other issues threatening the future of Africa.
Our projections show that this green innovation could increase Ethiopia’s gross domestic product by more than 3%. What is crucial for agriculture-dependent countries is investing in climate-smart agriculture, while factoring climate shocks into central bank policy responses.
Executive Director, African Economic Research Consortium
Former Governor, Central Bank of Kenya