The coronavirus pandemic has taken its toll on virtually every country it’s touched, but Africa is still facing big challenges in its recovery to economic health.
Indeed, struggles in accessing and using lifesaving vaccines, a third wave of infections, and growing poverty have left Africa in a precarious spot.
But according to Mo Ibrahim, a businessman and the founder and chair of the Mo Ibrahim Foundation, renewable energy could be a big part of the solution. “We need to recover not only sustainably and equitably—but also need to recover green,” he said at Fortune’s Global Forum virtual conference on Wednesday.
He argues that “the green economy is going to generate more jobs for our people, and Africa is very suitable for renewable energy,” with ample solar exposure and rural areas that are ideal for independent power systems, he noted. “Green really fits very well with Africa, and it’s going to change people’s lives [and] bring a lot of people into the production zone.” Added Ibrahim, “What we need to do is very clear.”
Indeed, according to a recent report from the Mo Ibrahim Foundation on the impacts and prospects of recovering from the pandemic, “though investment continues to be required, sustainable growth is now cheaper than ever, and with $10 trillion in ESG [environmental, social, and governance] capital looking for a return, there is a unique opportunity to grow green African financial markets.” The report also suggests that “green infrastructure investment could help electrify the 600 million Africans still off-grid.”
When it comes to attracting investment to Africa, Ibrahim also pointed out that “of course we need better governance, because better governance is also essential for investors,” he says.
But in the meantime, as Africa continues to deal with the economic and health fallout of the pandemic, business leaders like Ibrahim argue that financial support through programs like Special Drawing Rights (or SDRs) will be crucial in getting Africa back on the right path. An SDR is an “international reserve asset created by the IMF to supplement the official reserves of its member countries,” according to the International Monetary Fund.
“The economic hit has been really severe,” Ibrahim said. “The SDRs are a very useful tool, because at [a] low cost, it can help you restart your economy…We are calling for all the rich nations to help lend some of the SDRs to African countries that enable them effectively to borrow cheaply.”
That, argues Ibrahim, could help put Africa on the path to “try and rebuild.”