The president of the African Development Bank Group, Akinwumi Adesina, has reiterated his warning that the introduction of a carbon border tax by the European Union could push Africa back into exporting raw commodities and undermine its industrialisation gains
The European Union recently launched the initial phase of a Europe-wide carbon tax on imported goods as part of its climate change reduction measures. Adesina said this could penalise African countries.
“African companies that are making cement, steel, aluminium, fertilisers and trying to export to Europe are going to be charged a border tax of 80 euros per tonne. That is very expensive, and all that is going to do is that countries in Africa that already suffer from tariff escalation when they add value to what they produce, now you are forcing them down the value chain,” Adesina said.
Adesina spoke during a high-level panel session at the recent Doha Forum on 'Decoding the Debt Dilemma - Unveiling Multilateral Solutions'. Other speakers were Qatar’s Minister of Finance Ali bin Ahmed Al Kuwari and Børge Brende, president of the World Economic Forum. CNBC anchor and correspondent Dan Murphy moderated the session.
“Africa is going to lose US$25bin annually,” Adesina said. “Africa deserves a carve-out on that [taxation] because we are financing Africa’s transition. You cannot industrialise just by renewables; you need a balanced energy mix that allows you to use your natural gas to be able to industrialise.”
He described natural gas as an essential resource for Africa that should not be restricted in foreign trade.
“Just trade is what we need, but give us just trade for a just energy transition,” Adesina added. “Africa should not be penalised.”
He noted that by introducing general punitive measures that also affect developing countries, developed countries are 'shifting the goal post' in the differentiated responsibility within the Paris Agreement by forcing developing countries to attain net-zero carbon emissions much earlier than stipulated.
