In September 2021, the African Development Bank launched a new initiative on integrating natural capital into development finance in Africa. This will be an opportunity to take stock of this project and its first achievements. The issue will be discussed at the Annual Meetings of the African Development Bank Group, scheduled for May 22-26 in Sharm el-Sheikh, Egypt.
About 30% of all global mineral reserves are located in Africa, including 60% of cobalt reserves and 90% of platinum group metal reserves. The continent contributes substantially to the global annual production of six key minerals: 80% for platinum, 77% for cobalt, 51% for manganese, 46% for diamonds, 39% for chromium and 22% for gold. Furthermore, Africa has more than 60% of the world's undeveloped arable land and is home to 13% of the world's population, 60% of which are under 25 years old, making it the youngest population in the world. Around 75% of African countries have access to the sea, offering great opportunities in the blue economy, whose global potential, if managed sustainably, is estimated at around $1.5 trillion.
Some countries have taken advantage of this natural capital, such as Morocco, which has created vast fields of solar and wind energy production. In 2022, the British company Xlinks, specialized in renewable energies, has announced the construction of a 3,800 kilometer submarine cable that will allow the United Kingdom to benefit from this energy.
In Egypt, the Nile, in addition to the operation of the Suez Canal, is used in various ways. Also in Egypt, the Benban solar photovoltaic plant, commissioned in 2018, will contribute to increasing the share of renewable energy to 42% in 2035. The park alone reduces CO2 emissions by two million tons per year. At full capacity, the park will produce 3.8 terawatt hours of electricity per year, equivalent to 90% of the electricity produced by the Aswan High Dam.
Africa must be able to use all its comparative advantages to mobilize resources to finance its sustainable development ambitions. Official development assistance has stagnated considerably since 2010 and has even fallen to its lowest level, reaching $34 billion in 2022, according to estimates by the Organization for Economic Cooperation and Development (OECD). Access to international capital markets remains quite restrictive and very costly due to a high perception of risk on the part of investors.
But the continent does not lack options and could, together with the mobilization of the private sector, take advantage of its "enormous" natural capital potential. This potential ranges from freshwater bodies to vast forest resources, including mineral deposits. This is what the Annual Meetings of the African Development Bank Group aim to demonstrate.