Africa’s Industrialization through Green Growth

27/10/2011
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The green economy may be in the way of Africa’s industrialization even if some of the continent’s industries are still grappling with efficient use of energy issues related to climate change.

These were the conclusions of some of the papers on Structural Transformation and Industrial Policies presented at the African Economic Conference, which went into its second day in Addis Ababa.

Salifou Issoufou and Nama Ouattara, from Universite Paris 11, France, in their paper entitled “Does Green Investment Raise Productivity?” indicated that there were three motivating factors for the green economy on the economic, environmental dimensions. These include an estimated US$50-170 billion per year adaptation cost by the year 2030, the contribution of green investment to reduce carbon emissions, and the ability to address famine and poverty by applying green agricultural methods.

The researchers said that they presented new cross-country evidence on the macroeconomic impacts of green investment. In the study they conducted using various data from 1987–2007 from 46 African countries, they arrived at the conclusion that green investment was detrimental to productivity growth.

“Given the negative impacts of green investment, African countries may have to forgo climate change issues in their quest for industrialization,” the study said. “Overall, African countries should be cautious in their eagerness to adopt green technologies.”

In the paper, which they hoped would further the intellectual and policy discourse about the costs and benefits of the green economy for African countries, that countries may need to address, or continue to address the issues of absorptive capacity, efficiency of investment, structural and cultural gridlocks in order to fully reap the benefits of green investment.   

“Energy Use and Sustainable Development: Evidence from the Industrial Sector in Nigeria”, a paper by Fidelis O.Ogwumike and Omo Aregbeyen, from the University of Ibadan, highlighted the case of Nigeria, where they criticized low-level awareness of energy efficiency issues among major Nigerian companies.

Finance for investment in energy efficiency is also not readily available either from retained earnings or bank loans due mainly to the financial crisis, according to the paper.

The presenters made their cases for the adoption of industrial energy efficient technologies and practices in developing countries as well as the introduction of incentives for energy efficiency practices.