Climate risk in Africa threatens the new global economy

Global economic hotbeds with fast-growing populations in Africa face the highest climate risk than any other region in the world. Cities like Kampala in Uganda, Dar-es-Salaam in Tanzania, and Lagos in Nigeria face the challenges of a population boom plagued by drought or crop failure.

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Climate risk is hitting the heart of Africa

In 2018, global research firm Verisk Maplecroft combined UN population data with their Climate Change Vulnerability Index (CCVI).

In the study, researchers found that 84 of the 100 fastest-growing cities in the world face ‘extreme risk’ from climate change. The remaining 14 cities fell under the ‘high-risk’ category. The overwhelming majority of the fast-growing cities in the world are in Africa.

Global inequality is linked to climate risk.

1. 95% of the 234 cities most affected by climate change fall in Africa & Asia.
2. 86% of the 292 ‘low-risk’ cities are located in Europe and the Americas.

• The world’s poorest with higher rates of urbanization face the greatest threats from climate disruption.
• Yet, the world’s most advanced economies (US, China, India, Europe) account for half of the world’s carbon emissions.
• The International Monetary Fund estimates that 8 out of the 10 fastest-growing economies between 2018 and 2023 will be African countries. This poses a serious risk to companies operating in the region.

Wealthier nations need to invest in climate resilience

There is a clear correlation between climate change vulnerability and population growth. But even remote islands like the Pacific Islands cope with rising sea levels.

Extreme climate risk in Africa makes an even stronger case for advanced markets to invest in climate resilience. Africa is the fastest-growing economic region in the world.

Many criticized Larry Fink’s Letter to CEOs in 2020, where he warned the world about climate risk in portfolio investments. Words don’t mean much from a climate impact standpoint. Still, his letter symbolized a shift on Wall Street toward ESG initiatives.

It’s time we apply these same climate principles to mindful economic development in African cities.

Advanced economies have a moral, scientific, and economic responsibility to mitigate the impact of carbon emissions in the regions they are so heavily invested. China and the United States make up a whopping percentage of the world’s emissions.

China especially (with billions of dollars poured into Africa) needs to make a conscious effort to build 21st-century cities with the native environment in mind.

Check out my article about Buddhist Economics for a more in-depth overview of how foreign investors can develop emerging economics thoughtfully and through the lens of sustainable development goals.