$1.4 Trillion Could Help Create New, Low-Emitting Substitution Businesses In Africa

McKinsey & Co, a global consulting firm released a report on the 27th September 2021 stating the economic implications of decarbonizing African manufacturing sector

in a report titled Africa’s green manufacturing crossroads: Choices for a low-carbon industrial future explained how the African economy can be transformed if she refrains from business as usual methods towards production process and adopt a greener method towards

“To remain competitive, our analysis shows the sector would likely need to reduce its scope 1 and 2 manufacturing emissions by about 90 percent relative to 2018 levels as part of the international effort to reach net-zero emissions by 2050 where an overall balance is achieved between emissions produced and emissions taken out of the atmosphere.11 The remaining 10 percent could be compensated using additional technologies and tactics such as carbon capture and storage, and reforestation.”

Decarbonizing Africa’s manufacturing and power sectors and building new green assets are likely to have profound economic implications for the continent, ensuring that African manufacturing can grow and create jobs without adding emissions and remain globally competitive. However, this pathway has significant costs.

“To reach net zero would likely require $2 trillion of additional investments in manufacturing and power over the next three decades. About $600 billion would be needed to decarbonize existing manufacturing industries and power networks—both through investments to retrofit brownfield manufacturing facilities and into new greenfield facilities that are zero-carbon by design. “

“The African economy  path to net-zero emissions may not be easy, but the risks of not achieving this goal, according to our analysis, outweigh the costs and sacrifices that would have to be made to get there. Action is more urgent now than ever, as the window to keep global warming below 1.5°C narrows. Across multiple sectors, the technology is readily available today, with additional low-carbon technologies expected to reach maturity and economic viability from 2030 to close the gap to full decarbonization by 2050. Meanwhile, investors and businesses have an opportunity to move fast and seize new green-manufacturing business opportunities.

At this critical juncture, and as Africa seeks to manage the fallout from the COVID-19 pandemic and chart a path to recovery, there is an opportunity to step back and reimagine the continent’s growth path with a more sustainable mindset. Africa’s manufacturing story can be about innovation, about new kinds of jobs, financing, and technology that are geared towards building a more sustainable and equitable society that will be felt for generations to come.”