African countries must explore innovative solutions for stable economies — Yofi Grant

African countries must explore innovative financing solutions to stabilise their economies, facilitate trade and promote sustainable development as they make a transition to green industrialisation and green economy.

That will help make the transition more impactful and effective in the continent’s quest to boost trade.

The Chief Executive Officer (CEO) of the Ghana Investment Promotion Centre (GIPC), Yofi Grant, who made the call said, as the continent moved more towards the green agenda, that initiative needed to be strengthened to attract investment and boost trade.

He was speaking at the Sustainable Trade Africa (STA 2024), a side event held at the 29th Conference of Parties (COP29) of the United Nations Framework Convention on Climate Change (UNFCCC) in Baku, Azerbaijan.

The event brought together African policymakers, heads of ministries, departments and agencies (MDAs) in the trade and climate space, and private sector players, including the Jospong Group of Companies (JGC).

It was focused on sustainable trade and climate resilience in Africa and aimed at pitching Africa’s green economic potential to the rest of the world and wooing investors across to channel their resources into the untapped green economy of the continent. 

Ghana story

Using Ghana as a reference, Mr Grant said the Gold for Oil policy that was deployed by the government had helped to stabilise the exchange rate a bit. 

"The problem with the high exchange rate for the dollar is that we had to buy and sell oil in dollars. To eliminate it, the central bank buys the Gold from the miners in cedis and strikes a transaction where they pay for the oil with gold, thereby eliminating the dollar equation.

"That has worked very well because it has made our oil imports cheaper because we are buying with a product that is obtained from Ghana," he explained. 

Mr Grant also said the Pan-American Payment System initiated by AFREXIM and supported by the central banks in Africa and the AfCFTA had proven to be a good vehicle for trade facilitation.

He said that the payment system had created a mechanism where African countries could buy local exports and pay for it in the local currency of the importer, eliminating the dollar as the third party.

The GIPC CEO also observed that as African countries looked at partnerships, they must tailor them within the context of the Sustainable Development Goals (SDGs), "which is the track on which the world is proceeding now in terms of green financing, green technology and green industries".

He said the focus must be on SDG one and SDG 17, which deals with poverty eradication and partnerships for trade respectively.

Framework

The Secretary-General of the Africa Continental Free Trade Area (AfCFTA), Wamkele Mene, said in response to the global green transition, AfCFTA had collaborated with many countries to roll out the African Green Industrialisation initiative.

He said the framework that had been developed for the green agenda would ensure that African countries continued on the path of green industrialisation, adding to the production of critical minerals, as well as accelerating the projects in renewable energy.

"I believe as a result of the Africa Green Industrialisation initiative, the continent of Africa has turned a page on the binary discussion between development on the one hand, industrial development on the one hand, and whether or not we develop in a manner that pollutes our environment," Mr Mene added.