The African Development Bank (AfDB) has warned that the European Union’s new border carbon tax could significantly limit progress in Africa, trade and industrialisation by penalising the growth of value-added exports. According to Akinwumi Adesina, Africa could lose up to 25 billion dollars a year as a direct result of the EU carbon tax’s border adjustment mechanism.
The African Development Bank (AfDB) believes that the new carbon tax at the European Union’s borders could significantly limit progress in Africa’s trade and industrialisation by penalizing the growth of value-added exports, including steel, cement, iron, aluminum and fertilizers. According to the President of the AfDB, Akinwumi Adesina, with Africa’s energy shortages and heavy dependence on fossil fuels, particularly diesel, means that Africa will once again be forced to export raw materials to Europe, leading to further de-industrialisation in Africa.
« This has a negative impact on Africa. The reason is that African companies that make cement, steel, aluminum and fertilizers and are trying to export to Europe are going to be charged a border tax of 80 euros per tonne, so it’s very expensive, all it’s going to do is it’s going to force African countries that are already suffering from rising tariffs at the very time they’re adding value to everything they produce, you’re now forcing them down the value chain. »
Akinwumi Adesina, President of the African Development Bank – Nigeria
Dr Adesina points out that Africa is already neglected in the global energy transition. According to the AfDB President, Africa has received just $60 billion, or 2% of the $3,000 billion in global investment in renewable energy over the past two decades, a trend that will now have a negative impact on its ability to export competitively to Europe.
« If we are talking about Africa, which mobilises resources, it cannot lose 25 billion dollars a year and then be fined. Africa only contributes 3% to global greenhouse gas emissions. The total amount of space available in the world today for all emissions is 4,000 gigatonnes; developed countries use 4,000 gigatonnes. So give Africa a little space so that it can develop and have stable energy. «
Akinwumi Adesina, President of the African Development Bank – Nigeria
The rapid decarbonisation of Africa’s fossil fuel exporting countries could reduce commodity exports by up to $150 billion, according to the preliminary findings of a recent study commissioned by Afreximbank.
