Although in recent years Africa has suffered enormously from extreme and unpredictable weather events such as floods, droughts and hurricanes, the evidence shows that we are not doing enough to move towards sustainability.
Missing, inconsistent or unreliable data prevents us from understanding the context and status of some goals. For the continent to realise its UN Sustainable Development Goals commitments, there is a lot of work for us to do.
The World Economic Forum (WEF) is one important platform where we can accelerate this work. For 50 years, the WEF has provided a platform for leaders from the private sector, public sector, civil society and other organisations to address the large complex forces shaping our world. Issues such as the climate crisis and cybersecurity require long-term thinking and cannot be managed without global cooperation.
The need for collaborative solutions is illustrated in the theme for this year’s WEF – Stakeholders for a cohesive and sustainable world. It speaks to our collective responsibility to address global problems. It’s not about any specific industry, organisation or country taking responsibility – it’s about all of us working together.
As one of Africa’s largest financial services providers, Absa is proud to participate in the WEF. Africa holds enormous demographic and economic potential and is central to Absa’s identity – our African heartbeat is one of the core values that unify our employees across 12 countries. Mindful of the challenges facing our continent, we’re committed to playing a shaping role in society through the work we do and the relationships we form through platforms such as the WEF.
This year, we’ll focus on three closely related themes, in line with the WEF focal areas: the climate crisis and the environment, financial and monetary systems, and trade and global economic interdependence.
The climate challenge and the environment
Last year, the UN announced that, to limit the rise in temperature to 1.5°C, in line with the Paris Agreement, global greenhouse gas emissions need to fall by 7.6% annually between this year and 2030. The programme noted an increase in emissions, temperatures and extreme weather events around the world – such as the Australian bushfires, which are estimated to have burned 6.3 million hectares and killed more than 500 million animals.
The threat of the climate crisis is quickly becoming more urgent and severe.
The finance industry is playing an increasingly important role in global efforts to mitigate the climate crisis. For example, Bank of England governor Mark Carney was recently appointed the UN Special Envoy for Climate Action and Finance following his efforts to integrate climate risks into central bank stress testing of banks. A range of frameworks and commitments have been developed to help guide the sector.
The climate crisis is one of the biggest sustainability challenges we face and we welcome our industry’s increased engagement with the problem. Absa is committed to improving sustainability in our lending practices, operations and stakeholder engagement. Last year, we signed on to the UN’s Environment Programme Finance Initiative’s Principles for Responsible Banking. These six principles, developed through a partnership between the UN and banks across the world, form our overarching framework for managing sustainability risk. We will begin reporting against the framework this year.
Financial and monetary systems
We share the WEF’s commitment to ensuring modern, robust financial and monetary systems as essential enablers for investment, growth and development. We are well-placed to contribute in this area, including through social and thought leadership initiatives.
Technological change has enabled rapid financial and monetary development, especially in Africa, such as with mobile payments. More broadly, the fourth industrial revolution offers the potential for innovative solutions to our most pressing needs in areas such as infrastructure, education and energy.
We are passionate about unlocking this potential, for example as a strategic partner to last year’s SingularityU Africa Summit. SingularityU is an international organisation committed to leveraging technology to address social problems and prepare Africa for the future.
Separately, through our WorkInProgress innovation lab, we encourage entrepreneurs, innovators and start-ups to connect, create and develop solutions. We host 40 businesses at this Cape Town-based site.
Before technology can benefit us, however, we need reliable data and assessments to understand our context. Data scarcity is a major problem on the continent.
Last year, Absa published its second Africa Financial Markets Index, evaluating financial market development in 20 African countries. The publication is a reliable data source and a toolkit empowering central banks and governments to strengthen financial market infrastructure. Absa’s corporate and investment banking team has worked with stakeholders to implement some of the measures identified in the publication.
Any change of this scale brings new risks: The fourth industrial revolution has also exposed cybersecurity vulnerabilities in many organisations. In 2018, cybercrime was estimated to cost companies around US$241 billion (about R3.5 trillion).
Cyber Ventures estimates that the world will have about 3.5 million unfilled cybersecurity jobs by next year. In this context, we have opened the Absa Cybersecurity Academy, in partnership with the Maharishi Institute, to help bridge this gap by upskilling unemployed youth.
All our students come from marginalised backgrounds and benefit enormously from a holistic approach to education, balancing technical, social and emotional skills through bridging courses and personal development.
In addition to technical skills, we are focused on developing the next generation of African leaders. We currently support 50 students from eight African countries studying at the African Leadership University in Rwanda, which aims to educate and develop ethical and entrepreneurial leaders who are agile, lifelong learners.
We also support the African Youth Networks Movement, an initiative from the Mandela Institute for Development Studies, which brings young leaders together to debate and rethink social challenges. We are partnering with the institute to host regional dialogue sessions and summits over the next three years.
Trade and global economic interdependence
Last year, African policymakers directly countered rising trade protectionism in other parts of the world when they signed the AU-brokered Africa Continental Free Trade Agreement. This agreement, which covers 1.2 billion people with a combined gross domestic product of $2.5 trillion, is another step towards realising our power as a continent.
Closer trade integration across Africa holds enormous economic potential, in part because intra-African trade is relatively low. Continental trade accounts for about 17% of total exports in Africa, compared to 31% in North America and 69% in Europe.
This step was an acknowledgment of the need for closer integration and greater cooperation in the face of global challenges and in the context of the fourth industrial revolution.
As this year’s WEF gears up to tackle these big questions, its scale of work may seem overwhelming. Yet our initiatives remind us that there are countless Africans devoted to realising the continent’s possibilities – with daily successes.
Absa is one of many African-based multinationals proud to call Africa home. By channelling our energy and innovation together, we can address our challenges.
It’s time for us to ensure that the fourth industrial revolution heralds a cohesive and sustainable world where Africa shines.
Peter Matlare is the deputy chief executive of the Absa Group, and is responsible for Absa’s regional operations business
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