Nigerians in America, those in the state of Colorado probably constitute the third largest group of African immigrants after perhaps Ethiopians, and Eritreans, who have settled in the state. Nigerians in America, a portion of the population of Africans in the state constitute parts of the state’s electorate. We found out about these Nigerian organizations…
Climate vulnerable nations in Africa are showing growing interest in debt-for-climate swaps to address ballooning debt and spur climate investments. Increasingly, they have the ear of financial institutions.Today, 58% of the world’s poorest countries are in debt distress or at high risk of it. In sub-Saharan Africa, Covid-19 has squeezed budgets and pushed average debt levels above 60% of GDP.
Helene Gichenje is the Commonwealth’s regional climate finance adviser for Africa. Russia’s war in Ukraine and rising global inflation “are likely to significantly worsen the debt crisis,” she said at Africa Climate Week in Gabon on Wednesday.
High levels of debt repayments and a shrinking fiscal space have prevented much-needed investments in climate resilience, Gichenje said. And climate vulnerability is driving up the cost of accessing capital.
“There is danger that the vulnerable developing countries will enter a vicious cycle,” she said.
The IMF, the Green Climate Fund and the African Development Bank increasingly support debt-for-climate swaps as a solution.
Nigeria plans gas-led transition to full energy access and net zero emissions
Debt swaps mean that instead of making payments to creditors on outstanding loans, debtor countries can use that money in local currency to invest in climate projects under terms agreed with creditors.
This form of debt relief has been around for 30 years but hasn’t seen much use. Despite some positive examples, including a debt-for-nature swap in the Seychelles, the IMF estimates that only up to $4bn worth of debt has been forgiven under swap programmes.
Fiscal space
Cabo Verde, Eswatini and Kenya are among nations looking into how to make debt-for-climate swaps work for them.
“Debt swaps could be a good instrument to give us space in our budget for new investments in renewable energy and the blue and green economy,” Soeli Santos, treasury director at Cabo Verde’s ministry of finance, told the event.
In exchange for partial debt forgiveness, Cabo Verde would, for example, meet some of the commitments made in its 2030 climate plan, Santos said.
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The principle generated significant interest during a meeting of African climate experts in Ethiopia last month as part of discussion on climate finance.
The Egyptian Cop27 presidency is considering launching a debt swap framework at the climate summit in November.
And a number of financial institutions have started to explore how to scale up the relief swaps can provide.
IMF guidance
Last month, an IMF working paper, co-authored by the fund’s deputy chief in the debt department, concluded that, in some circumstances, debt-for-climate swaps made economic sense.
“There is a space for debt-for-climate swaps in the broader climate finance toolkit,” said IMF senior economist Vimal Thakoor. “In many countries, grants are not forthcoming necessarily and debt relief is not necessarily on the table either.”
However, in countries with high levels of debt distress, swaps should not replace broader debt restructuring programmes, the paper argues.
Scaling up debt swaps requires bringing on board a large pool of private and official country creditors. That is no small task but something creditors might be willing to do to support climate goals, it added.
G20 Bali meeting highlights Indonesia’s weak climate action
Although the paper hasn’t been endorsed by the IMF’s board and management, Paul Steele, chief economist at the International Institute for Environment and Development (IIED), told Climate Home it could be “potentially game-changing” should it gain political backing.
“The IMF has the credibility and the most leverage to bring together creditors in a way that would allow them to take forward this kind of international initiative,” he said. “An international initiative on debt swaps for climate and nature outcomes at Cop27 could break the logjam on climate finance.”
The IMF is not alone in exploring options to move this forward.
Andrey Chicherin, head of innovation and technology transfer at the Green Climate Fund, told the meeting that the fund could act as an intermediary in debt swaps by designing adaptation and carbon-cutting programmes and ensure their delivery against the fund’s verification systems and safeguards.
The African Development Bank is finalising a feasibility study on scaling up debt-for-climate and nature swaps in Africa. This is to inform advice to nations on debt relief options.
Donald Trump thought it was full of “shitholes” and countries with names such as “Nambia”. Barack Obama, for all his eloquence and family ties to Kenya, was underwhelming when it came to defining a practical strategy towards Africa — a continent that always slipped behind other regions in the list of priorities. You have to go back to George W Bush, particularly his principled stance in fighting the Aids epidemic, or Bill Clinton, with his Africa Growth and Opportunity Act, a preferential trade pact, for an American leader with a compelling offering. If the US has been relatively low key, others have not. Since the turn of the century, China has moved from a bit-part player to the main investor and trading partner for many countries from Angola to Ethiopia. Much of the infrastructure that has sprung up across the continent has been built by Chinese companies. Outside the extractive industries, American companies have been slower to see commercial opportunities than those from emerging nations such as Turkey and India. More recently, Russia has pursued a cut-price diplomacy, sending mercenaries to Mali and the Central African Republic to prop up dictatorships and shady companies.President Joe Biden is now seeking to redress the balance. The reticence of African states to vote with the west in condemning Russia’s invasion of Ukraine (26 refused to do so) may have sharpened his thinking. Diplomatic engagement has been stepped up. Washington will hold a US-Africa summit in December, the first in eight years. Biden has reversed a decision by the Trump administration to draw down US troops from Somalia and the Sahel, both regions of persistent terrorist threat. Antony Blinken, secretary of state, has made two tours of the continent, the latest in August when he swept through the Democratic Republic of Congo and Rwanda. In South Africa, he launched what was billed as a reset of relations. As he said, the 54 countries that make up the continent play a more important role in world affairs than is widely recognised. By 2050, one in four people on Earth will be African. If a majority are flourishing, they will be a source of huge dynamism and ideas. If many are floundering, they will fuel the problems of uncontrolled migration and unstoppable deforestation.A third of the minerals that will be needed for the transition to sustainable energy lie beneath African soil. African people — and not just their elites — must benefit from the potential windfall with more transformation of raw materials on the continent itself. In the Congo Basin rainforest, central African states host the world’s second-largest lung. African capitals marshal a quarter of UN votes. A Nigerian heads the World Trade Organization and an Ethiopian leads the World Health Organisation. The policy paper that underlies the new approach lays out broad strategic objectives. Washington will support open societies, democracies, recovery from the shock of the pandemic and a just energy transition (for which read: it won’t oppose gas). Washington will work with its “African partners”: a phrase intended to convey that it is listening, not hectoring.The US offering is positioned in deliberate contrast to what it calls China’s “narrow commercial and geopolitical interests” and the Russian view of Africa as a playground for private military companies. What are African governments to make of this? Many were not impressed with US leadership during the pandemic, when the west gobbled up available vaccines and left Africans to fend for themselves. (Biden’s support for overriding intellectual property on Covid vaccine technology was seen as an important exception). The US — with its contested elections and rolling back of liberties — has also somewhat lost the democratic high ground.Chidi Odinkalu of the Fletcher School of Law and Diplomacy at Tufts University detects a cold war throwback. “The US has come to the conclusion that, if they don’t re-engage, they will be abandoning Africa to Russia and China.” Still, Alex Vines, director of the Africa Programme at the UK think-tank Chatham House, sees an opportunity for the continent. “This is Africa’s moment,” he says of the multinational engagement. However shaky, the US with its deep well of wealth, innovation and democratic ideals is a partner worth courting, he says. If diplomacy is transactional, then the countries of Africa should get ready to deal. david.pilling@ft.com
Colorado Taste of Africa The Colorado Taste of Africa is an annual Africa-focused event that brings together the African community in Colorado to celebrate the continent’s peoples, cultures, and businesses in a friendly community atmosphere. However, there are several groups in the state that identify as the Colorado Taste of Africa. Yet the one…
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In April 1897, Frederick Horniman, at the time Britain’s wealthiest tea trader and an avid collector, was offered an opportunity he could not refuse. Through “established commercial sources and private collections” he acquired 12 items of what was referred to as “Benin material” for the modest sum of £30. Horniman, a Quaker whose parents had been part of the anti-slavery movement and who as a Liberal MP campaigned for what became the welfare state, had become almost certainly the first person in Britain to purchase items stolen barely weeks earlier from Benin City in an 18-day rampage by 5,000 British troops sent to sack one of West Africa’s foremost civilisations. Upon its return to the UK, the booty from the openly punitive raid was sold, both officially by the Foreign Office to recover the cost of the military operation, and unofficially by the troops themselves, a number of whom had been sufficiently comfortable with their looting in present-day Nigeria to be photographed beside their hauls. Gentleman aficionados such as Horniman would have been the subject of many offers from these “private collections” and in the next two years, the tea trader continued to acquire 60 more objects emptied from the Benin citadel, among them ornamental plaques telling stories of tribal history and a key to the palace of the Oba, or king. Worth millions but acquired for the equivalent of a few thousand pounds of modern money, these “Benin bronzes” were put on display among thousands of other artefacts in Horniman’s palatial home in the plush south London suburb of Forest Hill. Shortly after 1901 a purpose-built museum on the site was bequeathed by the magnate to the then London County Council for the “recreation, instruction and enjoyment” of the capital’s populace. Horniman’s goal, as he saw it, of “bringing the world” to a suburban corner of the British empire’s capital was complete. A century or so later, the museum’s trustees, required to oversee and shape Horniman’s increasingly thorny legacy, this week recorded another first in his name. More on British MuseumAfter a two-year process of consultation and evaluation, it was announced that the 72 Benin bronzes are to be returned to Nigeria, making the Horniman the first major museum directly funded by the Department for Culture, Media and Sport to undertake such a large-scale act of restitution of colonial-era plunder. The pledge to return the items was made all the more significant by the unvarnished recognition of wrongdoing that accompanied it. Eve Salomon, chair of the Horniman’s trustees said: “The evidence is very clear that these objects were acquired through force… It is both moral and appropriate to return their ownership to Nigeria.” Other British institutions have previously undertaken smaller returns of Benin artefacts, led by Aberdeen University and Jesus College, Cambridge last year. But there is a growing view that the Horniman Museum’s decision – alongside a similar announcement last week by Oxford and Cambridge universities to seek the return of 200 items to Nigeria – is a watershed moment in a restitution campaign which has seen the slow erosion of a decades-long refusal by cultural institutions (the UK holdings of Benin bronzes are held by 150 separate bodies) to contemplate the surrender of ill-gotten gains. It is a fact which bears repetition that nearly 90 per cent of major African works of art and artefacts are held outside Africa, most of them in Europe.
On Monday, U.S. Secretary of State Antony Blinken introduced the Biden administration’s much-awaited strategy for Africa. Speaking in South Africa, during his second trip to the continent in less than a year, Blinken outlined the policy against a backdrop of the pandemic, the war in Ukraine, and a global economic slowdown. Although somewhat comparable to…
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