Akinwumi Adesina, the president of the African Development Bank (AfDB), has raised serious concerns regarding the significant undervaluation of Africa’s natural capital by foreign corporations. Speaking to the Financial Times, he highlighted that these companies are paying alarmingly low prices for the continent's carbon sequestration capabilities, effectively engaging in what he termed 'carbon grabs.' Adesina's remarks come as he prepares to leave his position at the bank in September after a decade of leadership.

Adesina noted that while the world has previously witnessed land grabs, the current trend is shifting towards the exploitation of carbon credits. He lamented the stark difference in pricing for carbon credits in different regions, stating, "The cost of getting permits in Europe can be as high as €200 a tonne, yet in Africa, it can be as low as $3. Countries are losing vast areas of forest, which I refer to as a carbon grab." This disparity underscores the ongoing environmental and economic challenges facing African nations in the global carbon market.

Many companies are involved in trading African carbon credits, which are often linked to efforts to prevent deforestation. Some initiatives, such as cookstove programs designed to reduce emissions by allowing consumers to prepare meals without relying on firewood, have faced scrutiny for their effectiveness. This skepticism has subsequently impacted the market price of carbon credits. According to data from MSCI Carbon Markets, the average price of a carbon credit, which represents one tonne of CO₂, was just $4.80 last year, down from $6 the previous year. In contrast, some Western developers claim to offer more expensive credits for projects aimed at permanently storing CO₂ underground.

Adding to the frustrations surrounding carbon credit pricing, Rudolph Merab, head of Liberia’s Forestry Development Authority and a former timber industry leader, expressed his discontent to the Financial Times. He stated that Liberia has not received any revenue from the carbon stored in its forests and criticized the measly offer of $1 per tonne of CO₂ sequestered in the nation’s woodlands.

In light of these issues, Adesina emphasized the need for Africa to reevaluate how its Gross Domestic Product (GDP) is calculated to incorporate the true value of its natural resources. He argued that if the continent accurately accounted for its wealth in oils, gas, minerals, metals, biodiversity, and carbon, it could potentially facilitate better borrowing terms for African nations. "These resources run into trillions of dollars, yet they are not reflected in Africa's GDP calculations," he said.

Additionally, Adesina advocated for the full utilization of Africa's hydrocarbon resources and cautioned against adopting an overly ideological stance on renewable energy. He pointed out the hypocrisy of preventing Africa from harnessing its gas resources while many parts of the world benefit from them. As the AfDB currently prohibits financing for upstream oil and gas exploration, it will be up to Adesina's successor to determine whether this policy will be re-evaluated.

In a broader context, Adesina remarked on the need for Africa to adapt to a global landscape characterized by increasing trade tensions and declining aid from Western nations. He sincerely believes that Africa must shift its approach toward development, emphasizing that the continent cannot rely on external benevolence. "Africa is not going to beg its way to development; it must achieve progress through trade and investment," he stated.

Former UK Prime Minister Tony Blair, who met with Adesina recently, echoed these sentiments, suggesting that the West should pivot from short-term aid initiatives to long-term development strategies that address the structural challenges facing African economies. He remarked, "There’s an opportunity for the West to engage meaningfully with Africa, focusing on solutions that induce structural change rather than short-term fixes that may save lives but do little for long-term economic health."

Adesina agreed that tackling high debt levels is crucial for Africa's financial stability. He spoke about the AfDB's support for establishing an African Financing Stability Mechanism designed to provide refinancing assistance to governments at risk of debt distress. The bank is also working to stretch its limited capital further by collaborating with private investors, thereby transferring some loan risks off its balance sheet.

Furthermore, Adesina underscored the necessity for Africa to attract greater investment while advocating for reforms in the international financial system that currently misprices African risk. He supported the idea of creating an African rating agency to counter the influence of established firms like Moody’s, S&P Global Ratings, and Fitch, which he believes employ inadequate methodologies in assessing Africa's risk profiles.

As the AfDB prepares for elections to choose Adesina's successor during its annual meeting in Abidjan in May, the issues raised by Adesina highlight critical challenges and opportunities for Africa's economic landscape moving forward.