Remarks by Hon. Prof. Mthuli Ncube at The Fifty-Sixth Session of The Conference of African Ministers of Finance, Planning and Economic Development

REMARKS

BY

HON. PROF. MTHULI NCUBE

(MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION, ZIMBABWE)

AT

THE FIFTY-SIXTH (56^TH) SESSION OF THE CONFERENCE OF AFRICAN MINISTERS OF FINANCE, PLANNING AND ECONOMIC DEVELOPMENT

 

28 February - 05 March 2024

 

Elephant Hills Hotel, Victoria Falls, Zimbabwe

 

SALUTATIONS

 

The Executive Secretary of the United Nations Economic Commission for Africa, Mr. Claver Gatete;

Esteemed Delegates;

Senior Government Officials;

Distinguished guests and dignitaries;

Ladies and Gentlemen;

1. Let me begin by welcoming you all to Zimbabwe, specifically to this majestic Victoria Falls, one of the Seven Wonders of the World.
2. I wish to express our deepest appreciation for the opportunity to host the 56^TH Session of the UNECA Conference of African Ministers of Finance, Planning and Economic Development, running under the theme: “Financing the Transition to Inclusive Green Economies in Africa: Imperatives, Opportunities, and Policy Options”.
3. Allow me to take this opportunity to extend my sincere congratulations to Dr Claver Gatete on his appointment as Under Secretary General and the Executive Secretary of the United Nations Economic Commission for Africa. We wish him a successful tenure at the helm of UNECA.
4. We also want to commend UNECA’s support towards the development of Africa over the years. Among other sectors, UNECA has provided, support to the African Union and its Member States in the implementation of the African Continental Free Trade Area (AfCFTA) Agreement.

Hon. Ladies and Gentlemen;

1. This Conference offers an important platform for African Ministers of Finance, Planning and Economic Development and Central Bank Governors to converge and exchange ideas, experiences, and knowledge.
2. This year, this esteemed gathering provides us an opportunity to foster greater understanding and collaboration among African Ministers of Finance, ICT, Trade and Industry and Environment on the theme of our Conference. Implementation of this important theme requires a whole Government approach.
3. As you are aware, the primary objective of this Conference is to promote the economic and social development of our Member States, foster intra-regional integration, and promote international cooperation for Africa's development. It is also an opportunity for us to collectively address the challenges and opportunities that lie ahead as we continue to navigate the post COVID-19 era.

Ladies and Gentlemen

1. The hungry world cannot be fed until and unless there is a balance in growth of resources, technology and population. It is unfortunate that Africa is not leveraging its resources including land.
2. As the continent has around 127 million hectares of potentially irrigatable land of which only around 13% of this land is currently being used for irrigation. We have vast water bodies to irrigate our rich soils; all we need is investment in advanced irrigation technology and enough funding to climate-proof agriculture so that we become food-secure.
3. Financing the transition to inclusive green economies comes with a cost and we need to finance this transition with the support of the international community and promoting investment in renewable and environmentally friendly sources of energy.

Ladies and Gentlemen

1. It is high time we join hands as a continent and strengthen our existing regional trading blocs, such as the African Continental Free Trade Area (AfCTA), to promote the free movement of goods and services within Africa.
2. I call upon all Member States to remove barriers to all entry and exit points so that we create a single market for our goods and services that promote intra-African trade, as well as industrial development.
3. It is my hope that the AfCFTA will make Africa more competitive in the global economy and that it will create jobs and increase economic growth across the continent.

Ladies and Gentlemen

1. There is an urgent need for domestic resource mobilization towards financing the transition to inclusive green economies as it helps to mobilize private sector investment in climate change mitigation and adaptation projects.
2. I also call for experts here present to interrogate the role of the current architect of the International Financial Institutions (IFIs) and systems, in view of the unequal impact of global shocks on weaker countries on the continent.
3. As you are aware, Africa has limited fiscal and monetary policy space to respond to shocks and is often highly dependent on international financial institutions.
4. For example, during the peak of COVID-19, countries were given Special Drawing Rights by the International Monetary Fund.
5. However, poor countries particularly African countries received a very small share by design even though they were the most vulnerable.
6. It is worth mentioning that African countries are growing and geo-political tensions and the impact of climate change, have all posed a financial impact on the continent.
7. Therefore, the continent needs additional financing mechanisms to meet this growing demand. The emergence of non-traditional lenders in recent years has also complicated the debt resolution process.

Ladies and Gentlemen

1. I wish to highlight that Africa's greenhouse gas emissions are relatively low compared to the rest of the world, accounting for less than 5% of global emissions. However, Africa is disproportionately affected by the negative impact of climate change, which includes extreme weather events such as droughts, floods, and heat waves.
2. According to the Intergovernmental Panel on Climate Change (IPCC), the 10 warmest years in the 174-year record have all occurred during the last decade (2014–2023). This trend is attributed to the ongoing effects of climate change, including the greenhouse effect and the loss of ice and snow cover.
3. This impact is exacerbated by the fact that many African countries lack the resources and infrastructure to adapt to climate change. This has led to increased poverty, crop losses, and the loss of human lives, hence the need for a just and fair energy transition.

Ladies and Gentlemen

1. In our region, as a result of climate change, in March 2019, Cyclone Idai, led to the loss of over 1 000 people in Mozambique. It caused widespread devastation in Zimbabwe, with at least 259 people losing their lives and leaving over 500 000 people in need of assistance. It destroyed homes, roads, and bridges, cutting off access to food, clean water, and medical care. In Malawi, the Cyclone affected nearly 900,000 people, with more than 230,000 people displaced.
2. Currently, drier-than-average conditions have become dominant across the southern region and the impact is more severe along the belt extending from the northern half of Namibia, Angola, Botswana, Zambia, and Zimbabwe into most of Mozambique.
3. This, therefore, calls for concerted efforts for rapid and deep emissions cuts by the developed countries and accelerated actions to adapt to climate change to limit the severity as the least polluting countries in Africa are the most affected. As an adaptation measure to combat climate change impacts, African countries should consider taking advantage of artificial intelligence to fight the effects of climate change such as droughts which result in crop failures.
4. According to the United Nations Environment Programme (UNEP), the total cost of transitioning to a low-carbon and climate change-resilient economy in Africa is estimated to be around US$130-170 billion annually until 2030.
5. This includes the costs of investing in clean energy, sustainable agriculture, water management, and building climate-resilient infrastructure. However, the benefits of making this transition are estimated to be much higher, with a potential net benefit of up to US$3 trillion per year by 2030.
6. As you are aware, at COP15 in 2009 developed countries committed to a collective goal of mobilising US$100 billion per year by 2020 for climate action in developing countries, in the context of meaningful mitigation actions, funding for adaptation, technology transfer and capacity building and transparency on implementation of these commitments. However, we are now in 2024 and African countries have not yet received the US$100 billion in climate finance that was promised by developed countries.
7. As stated in the African Leaders Nairobi Declaration on Climate Change and Call to Action, Africa can be a global powerhouse for climate action and offers an opportunity for investments for the continent to be a green industrial hub. It is important to unlock the renewable energy resources that we have on our continent.
8. Zimbabwe, on the strengths of its renewable and non-renewable resources has investment opportunities in solar energy, critical minerals, (eg lithium). The nearby Zambezi River also provides a huge opportunity for hydro power.

Ladies and Gentlemen

1. Africa is already in debt distress and for the Sub-Saharan Africa region alone, the level of indebtedness is high, at US$833 billion as of 2022. According to IMF, median public debt ratios have increased by about 30 percentage points, from 28.8% of GDP to 59.1% from 2012 to 2022.
2. The increases over the last decade are due to a series of shocks, including the COVID-19 pandemic, climate-related events, natural disasters, and high international prices for food, fuel, and fertilizers in the aftermath of geopolitical conflicts.
3. Worth noting are efforts put in place through the G20 Common Framework for resolving sovereign debt crises. The Framework aims to provide a coordinated and orderly approach to debt restructuring, to prevent and resolve debt crises while promoting economic growth and development.
4. The current market environment has become challenging for many African countries, with access to market financing tightening up or becoming very expensive as advanced economies have raised interest rates to fight inflation and international investors have become more risk-averse.
5. Official financing flows are also trending downward relative to the country’s economic size and needs. As a result, it is becoming increasingly difficult for countries to roll over their maturing debt, forcing them to make difficult policy choices.
6. In this context, debt restructuring has become a growing concern for African countries that are experiencing debt vulnerabilities and risks to debt sustainability.
7. In view of the above challenges, access to finance for Africa must be made cheaper and easier. Hence, there is a need to relook at the international financial architecture to ensure that it is fit for purpose, to support African countries to attain Agenda 2063 aspirations, to achieve the Sustainable Development Goals by 2030 and above all to reduce poverty which is the main challenge on our continent.
8. In addition, due to lack of access to climate finance, African countries are not able to reduce the negative impacts of climate change we face every year. To this end, I would like to join others who have called for the reform of the global financial architecture
9. Furthermore, the debt resolution mechanism such as the G20 Debt framework and climate change funding must be overhauled to accommodate Africa’s special and specific needs.
10. In addition, it is important that we valorise our natural capital by mainstreaming our natural capital accounting in our national accounts. This would lead to a rebasing of our GDP and expansion of our physical space and reducing vulnerability to external shocks. As we discuss the issue of greening our economies it is important to take into account our forests which can be the source for developing a thriving carbon market based on fair prices. 
11. Honourable Ministers, what I have listed above can become part of a formulation of an African Common Position for the Summit of the Future, a future where Africa has an integral part and plays an important role in the transition to a greener and more sustainable world.
12. This will be a future where Africa uses its natural resources to foster its industrialisation and economic diversification, ending the export of raw materials.
13. It is also important to overcome the digital gap by promoting digital transformation in Africa. To this end, science, technology and innovation must be at the centre of our education systems and development policies. This will help us create jobs for the youth as we continue with our efforts to reduce poverty on the continent. As Ministers of Finance, Planning and Economic Development, we have a big responsibility to make this a reality through allocation of resources, prioritisation of investments, and achievement of structural transformation.

Ladies and Gentlemen

1. As I conclude, I encourage all technocrats and government officials to freely share ideas and policy suggestions that will guide governments in decision-making.
2. I also encourage all of you to take advantage of this opportunity to visit the mighty Victoria Falls or Mosi-oa-Tunya (The Smoke That Thunders) and explore what Zimbabwe has to offer.
3. Let the thunder and beauty of this natural wonder inspire you as we discuss and deliberate on Financing the Transition to Inclusive Green Economies in Africa: Imperatives, Opportunities, and Policy Options.
4. May your experience in Victoria Falls be not only a memorable one but also a reminder of our collective responsibility to protect and preserve our natural and cultural heritage.

I Thank you, and I wish you all a productive and enlightening Conference.