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Solving Paradoxes of Africa's Development: Financing, Energy and Food Systems
Domestic Resource Mobilization (DRM) is a game-changer; Energy and Food Systems are drivers of sustainable economic transformation; and Strong Institutions are enablers to accelerate progress towards the Sustainable Development Goals (SDGs)
This flagship product draws on the report of the Secretary-General, ※Solving the paradoxes of development in Africa: financing energy and food systems§ (A/78/309).
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Three key paradoxes hamper Africa＊s sustainable development. The continent is rich in financial resources but in debt distress; rich in energy resources but with persistent deficits in access to electricity; rich in agricultural resources but with high levels of food insecurity.
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These three paradoxes intersect and feed one another.
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Therefore, solving them will require a holistic and integrated approach, recognizing their interconnectedness and the multiplier effects of interventions. The report positions domestic resource mobilization (DRM) as a game-changer. Energy and food systems are drivers of the sustainable economic transformation required, while strong institutions are enablers to accelerate progress towards achieving the SDGs.
African countries need to take the lead in calls for a comprehensive reform of the global financial system, in line with the Secretary-General＊s push for reform.
Solving Paradoxes of Africa's Development. UN OSAA, November 2023
Content Highlights
The report is organized into three chapters following a brief introduction. Chapter 1 discusses the three paradoxes, showing their interlinkages. Chapter 2 presents policy measures and actions to solve the paradoxes using the nexus between them as a multiplier intervention. Before concluding, Chapter 3 delves into the pivotal role of policies and institutions, particularly in the context of , as catalysts for development.
? Synthex / Adobe Stock Photo
$858 Billion
Lost through illicit financial flows from 2010 to 2018
Illicit Financial Flows (IFFs) out of Africa are at the heart of Africa＊s financial paradox, highlighting the critical importance for Africa to address its financial paradox by taking measures to curb IFFs, improving the efficiency of public expenditures, harnessing private savings and channelling them toward productive investments, de-risking country profiles as well as managing foreign reserves as a pro-development tool and grasping new opportunities such as carbon markets.
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>50% of Africa
Suffers from energy shortages
As the world strives for a sustainable future, Africa faces the challenge of reconciling its energy needs with the imperative to mitigate and adapt to climate change. This paradox calls for a delicate balance between exploiting its conventional energy resources and rapidly embracing clean, renewable alternatives to power its industries, cities, and rural communities to benefit from reliable and affordable energy sources.
? Vincent Tremeau / World Bank
Nearly 60% of the population
Grapple with food insecurity in Africa
The food paradox demonstrates that Africa＊s agricultural potential remains largely untapped. While the value added of agriculture as a share of GDP gradually increased, Africa＊s share in global agriculture production value remains comparatively low. Agricultural transformation in Africa must promote agricultural value chains, improve market access, and create beneficial continental trade and global exports.
Impact of external shocks
From COVID-19 to the climate crisis
Coming on the heels of the COVID-19 pandemic and climate crisis, the war in Ukraine exacerbated weaknesses in Africa＊s financing, energy and food systems. The resulting high energy costs and supply chain challenges impacted Africa, exposing its vulnerability to external shocks. Food and energy insecurities increased while wages stagnated, and governments spent more on servicing debt and imports than on social programmes.