There is so much that $25billion dollars can do for Africa. While the African Development Bank’s (AfDB) $25billion Fund is projected to help the continent overcome food insecurity in five years, the International Energy Agency (IEA) states that an annual investment of $25billion is needed in Africa for the people of the continent to have full access to electricity. This is to mention just a few critical sectors that readily provide the opportunity cost for the princely sum which is what Africa, according to the AfDB President, Akinwumi Adesina, risks losing directly to the European Union’s Carbon Border Adjustment Mechanism (CBAM).

While drumming home the implications of the new EU trade policy, the development bank chief pointed out that the mechanism could significantly constrain Africa’s trade and industrialization progress by penalizing value-added exports including steel, cement, iron, aluminium and fertilizers. He was emphatic that “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-industrialization of Africa”.

European Union in an attempt to level the playing field for all businesses operating in the bloc and prevent EU-based companies from being undercut by competitors in more-polluting regions of the world, CBAM is being introduced for importers to pay a carbon price equivalent to that paid by European producers under the EU Emissions Trading System (ETS). The European Commission describes the CBAM as its “landmark tool to fight carbon leakage”. Carbon leakage occurs when industries based in the EU move carbon-intensive production abroad to countries where less stringent climate policies are in place.

To read more, click on the link below
https://www.primebusiness.africa/africas-economic-survival-amid-eus-new-carbon-tax-pba-editorial/