Credit By: Ethiopian Monitor
According to Dr. Akinwumi Adesina, President of the African Development Bank Group, the proposed EU carbon border tax may negatively impact Africa. The levy might seriously obstruct trade and the advancement of Africa’s industrialization by punishing value-added exports like steel, cement, iron, aluminum, and fertilizers.
Consequences on African Trade and Industrialization
Adesina pointed out the possible repercussions: “With Africa’s energy deficit and reliance mainly on fossil fuels, especially diesel, the implication is that Africa will be forced to export raw commodities again into Europe, which will further cause de-industrialization of Africa.” He calculated that the EU Carbon Border Tax Adjustment Mechanism may cause Africa to lose as much as $25 billion annually.
Impact on Climate Change Compensation
Adesina voiced worry that Africa, which has already suffered greatly from climate change, might suffer even more from international trade. He stressed that intraregional commerce offers Africa its most significant economic prospects, with the proposed Africa Continental Free Commerce Area expected to boost intra-African exports by more than 80% by 2035.
Global Energy Transition Oversight
Furthermore, Adesina emphasized that the International Renewable Energy Agency figures show that Africa is already being disregarded in the global energy shift. The possible ramifications of the EU carbon border tax may make it more difficult for the continent to switch to greener energy sources and fully engage in international trade.
Dr. Adesina’s caution highlights the need for global trade policy to take a balanced approach, considering African countries’ unique opportunities and problems. A just and equitable international economic environment will depend on finding solutions that support sustainable growth and inclusivity as the globe navigates climate change and trade dynamics.
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