Africa shouldn’t need to beg for climate aid: Bank president

African Development Bank President Akinwumi Adesina, left, is joined by Masen President Mustapha Bakkoury during an event at UN headquarters in New York. (AP/File)
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Updated 11 February 2020

Africa shouldn’t need to beg for climate aid: Bank president

  • The financing promised to cope with climate change ‘needs to be put on the table’

ADDIS ABABA: Africa shouldn’t have to beg for help in addressing climate change, the president of the African Development Bank said Tuesday, adding that polluting global powers “have to pay.”

Akinwumi Adesina said during an interview on the sidelines of the African Union summit that the financing promised to African countries to cope with the consequences of climate change “needs to be put on the table.”

Africa’s more than 1.2 billion people stand to suffer the most from global warming while contributing to it the least. The region is also the least equipped to deal with its effects, according to experts. Parts of Africa are warming at a faster pace than elsewhere, and climate experts have said warming Indian Ocean waters have contributed to more powerful cyclones and the worst locust outbreak in decades in East Africa.

African heads of state are increasingly blunt about the dangers ahead and the need for the rest of the world, including top polluters such as China and the US, to step up and contribute to Africa’s efforts to adapt. “There has to be climate justice,” Adesina said.

The African Development Bank is increasing its own climate financing to 40 percent of its total investments, he said, with such financing having doubled from $12.5 billion to $25 billion. Half of that money is for climate adaptation.

“Africa shouldn’t be in a situation wherein it is begging,” Adesina said. “We are not going to deal with climate change by talking about it.”

Africa has 15 percent of the world’s population, yet is likely to “shoulder nearly 50 percent of the estimated global climate change adaptation costs,” the bank said, noting the continent has seven of the 10 countries considered most vulnerable to climate change: Sierra Leone, Nigeria, Chad, Central African Republic, South Sudan, Ethiopia and Eritrea.

And yet “to date, energy-related CO2 emissions in Africa represented around 2 percent of cumulative global emissions,” the International Energy Agency said last year.

“Major emitting countries and industrial sectors have a particular responsibility” to act, UN Secretary-General Antonio Guterres told the AU summit. “If they don’t deliver, all our efforts will be in vain.”


S&P cuts Oman rating deeper into junk, trims Bahrain’s outlook

Updated 29 March 2020

S&P cuts Oman rating deeper into junk, trims Bahrain’s outlook

  • External challenges, indebtedness and dependence on declining oil revenue cited as reasons for concern

DUBAI: Rating agency S&P has lowered crude producer Oman’s sovereign ratings deeper into junk territory, citing external challenges, and changed the outlook for Bahrain’s ratings to stable from positive due to the country’s dependence on
oil revenue.

The changes came after S&P recently cut its forecast the Brent crude oil benchmark to an average of $30 a barrel in 2020, $50 per barrel in 2021, and $55 a barrel from 2022.

S&P cut Oman’s long-term foreign and local currency sovereign ratings to “BB-” from “BB,” citing higher external risks and indebtedness.

“The sharp drop in oil prices in 2020 will intensify Oman’s fiscal and external pressures, leading to a faster deterioration in the government’s balance sheet, which has considerably weaker buffers than during the 2014-2015 oil price shock,” it said.

The outlook for Oman’s ratings is negative, the rating agency said, reflecting the risk that the government’s medium-term fiscal consolidation plans could be insufficient to stem the rising state debt. It expects the fiscal deficit will average almost 8 percent of GDP in 2021-2023.

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S&P has cut its forecast for the Brent crude oil benchmark to an average of $30 a barrel in 2020.

The large funding needs will be predominantly met through the issuance of foreign-currency debt, with the remainder financed by asset draw downs and domestic debt, it said.

S&P expects Oman’s external debt — adjusted for liquid external assets — will rise to 67 percent of current account receipts in 2023, from about 20 percent in 2018.

The rating agency said that the share of foreign-currency-denominated debt, largely held by non-residents, was high — at above 80 percent of total debt.

“We expect funding costs will rise despite monetary easing in the US, since portfolio flows to emerging markets could dry up and Oman’s macro-fundamentals are under pressure from external developments,” it said.

On Bahrain, the rating agency said its revenue remained dependent on oil, and hence sensitive to energy price shocks, despite efforts to increase non-energy receipts. “Recent revisions to our 2020 price projections for oil imply more elevated current account deficits for Bahrain, raising external vulnerabilities,” it said.

However, the provision of zero-interest loans from neighboring sovereigns — Saudi Arabia, Kuwait and UAE — and the expectation of further support, if needed, provide the government with an important financing buffer.