African nations have a unique opportunity to show leadership in redefining green markets on the continent and beyond.
Last year at COP28, Kenyan President William Ruto and COP28 President Sultan al Jaber called for developing countries to design comprehensive green growth strategies, building on their comparative advantages.
Now is the time to put in place the enabling environments that will guide industry into green pathways and attract green investments.
Why now? While African countries have contributed to fewer than four percent of global greenhouse gases, this will rise as Africa industrialises which, in addition to contributing to the climate emergency, could attract penalties in the form of export tariffs.
Moreover, heightened anxiety over global supply chain disruptions due to geopolitical tensions, has led to a strategic demand for processed minerals and components essential to decarbonisation efforts directly from Africa —a demand driven by more than just price considerations.
To develop robust green industrial policies, African leaders need to focus on three key questions.
How can existing sectors be greened?
Africa can develop a low-carbon manufacturing sector using its abundant renewable options, including solar and geothermal, as well as hydropower, where appropriate.
For example, Kenya’s e-mobility sector can claim low-emissions associated with the electricity it consumes, given that over 90 percent of energy from Kenya’s grid is through renewable power generation. Kenya now has its first company designing and manufacturing (and not just assembling) electric vehicles.
In which green growth sectors does my country have an advantage?
The African continent has a legacy of innovating solutions to their challenges and sharing them widely. In the context of the climate crisis, this strength is more relevant than ever. Africa holds 60 percent of the world’s best solar resources—a foundation for leveraging solar and renewable energy to decarbonise industries and drive sustainable development.
In Mozambique, authorities are proactively exploring how to leverage the country's renewable energy resources to decarbonise aluminium and steel production.
With an eye on the EU’s Carbon Border Adjustment Mechanism (CBAM)—which could foreseeably expand to cover the energy used in producing these metals, they are positioning Mozambique for a low-carbon future in these sectors.
While solar itself is intermittent, it can be traded to create value across the continent. The Southern African Power Pool sets a template for the entire continent to trade power at scale. If realised across regions, the savings potential would be immense.
For West Africa alone, our analysis shows that the region could save $30 billion annually, and 23 million tonnes of fuel oil. Once regional power pools are operational, connecting them to create a pan-African power pool would open new possibilities. Solar power generated in the west could meet peak demand in the dark evening in the east.
In a forward-looking move, the governments of Morocco and Mauritania are positioning themselves as energy exporters, by leveraging their geographic position and partnering with the private sector to produce green hydrogen for European markets—demonstrating Africa's capacity to address local and global energy needs sustainably.
Africa also holds a majority of the world’s critical minerals necessary for decarbonising energy and transport sectors.
In Angola, the DRC, Malawi, Mozambique and Zambia, governments are moving up the value chain from raw resource extraction to mineral processing and manufacturing.
Initiatives such as the shared logistics Lobito and Nacala corridors, and one-stop border posts between the countries will allow for the more efficient exchange of intermediate goods into one another’s adjacent value-chains, and quicker access to end-markets.
How can governments create an enabling environment for green industrialisation?
Public investment in research and development and for nascent green businesses, from conceptualisation to commercialisation will jump-start innovation.
Regulation and standards will clarify for investors what constitutes ‘green’ in the regional context:
Ghana, Kenya, Rwanda and South Africa have all done this by publishing ‘green taxonomies’, largely in harmony with one another.
Policy instruments to consider could include market incentives such as subsidies and tax exemptions (as the US provides under its Inflation Reduction Act), import substitution and export bans on raw materials to promote domestic value chains (as Singapore has with nickel); and carbon pricing through taxes, emissions trading schemes and import tariffs on carbon-intense imports from regions that levy a lower price of carbon, to ensure competitiveness and reduce emissions leakage (as the EU has).
At COP29 member governments of the Africa Green Industrialisation Initiative will share their visions for their countries' green industrialisation with partners. This moment could be decisive.
The entire green market landscape could change – and quickly – if African governments push this initiative now. This call to action is more than a response to climate change, it’s a unique opportunity for African nations to leverage their abundant natural resources, dynamic youth, and knack for innovation.
By establishing the right frameworks, African leaders can steer industries toward green pathways and attract green investments that will shape a resilient future.
