Building Resilient African Economies in the Face of Climate Shocks

On May 27, 2024, the Overseas Development Institute (ODI), in partnership with the African Economic Research Consortium (AERC), Economic Research Forum (ERF), and Partnership for Economic Policy (PEP), organized a critical side event at the African Development Bank Annual Meeting. Supported by the International Development Research Centre (IDRC), this event brought together leading experts to address the significant challenge of building resilient African economies in the face of global climate shocks. The African Activists for Climate Justice (AACJ) program also participated, bringing a vital perspective on grassroots climate resilience efforts.

Africa faces a compounding series of crises, with climate change being one of the most pressing. The continent is experiencing increasingly severe climate shocks, including prolonged droughts, intense floods, and unpredictable weather patterns. These events undermine economic, social, and developmental progress, exacerbate fragility, and disproportionately impact marginalized populations. The poorest and most vulnerable communities bear the brunt of these shocks, facing unique limitations that hinder their capacity to absorb and recover from climate impacts.

Somali Minister of Finance Binbin Iman emphasized the critical need for structural reforms and innovative financial instruments to address the compounded effects of climate shocks. “Our economies are at a tipping point. Without urgent, structural reforms and innovative financial solutions, the impacts of climate change will continue to exacerbate poverty and inequality,” he stated. Minister Iman highlighted the importance of international cooperation and support for African nations to build economic resilience. He underscored the necessity of rethinking traditional financial approaches and adopting new strategies to mitigate the impacts of climate change.

Professor Victor Murinde, Executive Director of the African Economic Research Consortium (AERC), presented research findings on the economic impacts of climate shocks on African economies. He discussed the role of evidence-based policy interventions in fostering sustainable and inclusive economic growth. Professor Murinde stressed the importance of leveraging research insights to inform policy decisions and development strategies. He highlighted how targeted interventions can help build resilience and support long-term development goals, particularly in the face of climate-induced challenges.

Jennifer Nkurunziza, a negotiator on loss and damage and climate financing, shared insights on the importance of addressing climate impacts in vulnerable regions like Somalia. She emphasized the need for innovative financing mechanisms to support adaptation and resilience-building efforts. “Somalia, like many other countries in Africa, is on the front lines of climate change. We must ensure that financing mechanisms are accessible and tailored to the needs of vulnerable communities,” she remarked aligning with the AACJ program’s efforts in Somalia, highlighting the critical role of financial support in building climate resilience at the local level.