African Leaders Call for Natural Capital to Be Included in Africa’s GDP Calculations

Baku, Azerbaijan, November 14, 2024 — African leaders at the COP29 summit are advocating for the continent’s vast natural assets, valued in the trillions, to be factored into the calculation of Gross Domestic Product (GDP). This approach aims to address Africa’s paradox of having abundant environmental resources yet limited financial returns.

In a statement released during the World Leaders’ Summit, they asserted that Africa’s role in global ecological stability—through activities such as carbon sequestration, pollution control, and water retention—should be recognized in each nation’s economic assessment.

Held under the theme “Measuring the Green Wealth of Africa,” the high-level meeting was co-convened by Republic of Congo President Denis Sassou Nguesso, Kenyan President Dr. William Ruto (represented by Prime Cabinet Secretary Musalia Mudavadi), and African Development Bank President Dr. Akinwumi Adesina.

The summit brought together heads of state, including Presidents Paul Kagame of Rwanda and Emmerson Mnangagwa of Zimbabwe, to promote the agenda of natural capital accounting. “Africa’s ecosystem services, such as carbon sequestration and pollution control, are global public goods.

By valuing our green wealth appropriately, we can unlock financial resources that will stimulate our economies and potentially improve our credit ratings,” stated President Ruto. Highlighting Africa’s important role in the fight against climate change, President Kagame added, “We are not asking for handouts; we want the world to compensate us for something that has tremendous value for all.” The leaders expressed concerns that Africa’s natural assets have been severely undervalued, which Dr. Adesina described as a situation where Africa is “green rich but cash poor.”

According to an African Development Bank report on “Measuring the Green Wealth of Nations,” Africa’s GDP was estimated at $2.5 trillion in 2018, significantly lower than the value of its natural capital, which stands at $6.2 trillion. Dr. Adesina noted that with a revised GDP measure, even conservative estimates suggest Africa’s nominal GDP in 2022 could have risen by $66.1 billion, based solely on carbon sequestration—a sum greater than the combined GDP of 42 African countries.

African leaders are also concerned about what they perceive as a “carbon grab” affecting the continent. Dr. Adesina pointed out the disparity in global carbon pricing, which can be as high as $200 per ton in Europe, while remaining as low as $3 to $10 per ton in Africa. He argued that this undervaluation is economically detrimental and undermines Africa’s sovereignty, as land designated for carbon credits cannot contribute to a country’s nationally determined contributions (NDCs) toward emissions targets. “Africa is essentially being underpaid for its role in carbon absorption, losing control over its lands in the process,” Dr. Adesina stated. “The ongoing carbon grab in Africa is a lose-lose situation.”

The leaders commended the African Development Bank’s efforts to spearhead this initiative, which has implemented mechanisms to mobilize the financial and technical resources necessary for supporting green GDP accounting across Africa. They agreed to collaborate with developing regions in Latin America, the Caribbean, and Asia to advocate for global recognition of natural capital in GDP metrics.

A comprehensive report on the outcomes of this high-level meeting will be presented to the African Union at its 2025 summit, where heads of state are expected to review and adopt the proposal.