Macroeconomic Frameworks for an Inclusive Green Economy in Africa

 

 

 

 

Announcement in Brief

Type :Self-paced Course
Programme Area :Urbanization, Economic Affairs
Beginning of the course :8th June – 12th  July 2021
Duration :5 weeks
Language :Bilingual (English & French)
Location :Web Based E-Learning
Fee :No Fee
Application Deadline :31th May 2021
Specific target audience :No
Website :https://services.unidep.org/e-idep
Applications :https://www.unidep.org/?apply

 

 

 PROGRAM RATIONALE

Sound macroeconomic policies are critical for growth and for the attainment of developmental objectives, including poverty reduction. Moreover, growth is important to create room for new investment opportunities in a green economy. Macroeconomic stability, or even economic growth, by itself, however, is not a desirable outcome, and policies should thus be judged in terms of their ultimate success in bringing societies to their desired outcomes such as social inclusion, freedom from poverty and human development. In the context of Africa, the desirable outcomes of macroeconomic policies are embodied in Agenda 2063. Among other imperatives, that Agenda underlines the need for structurally transformed economies to create shared growth, decent jobs and economic opportunities for all, and for modern agriculture to increase production, productivity and value addition that contribute to farmer and national prosperity and Africa’s collective food security. It also underlines the need for Africa’s unique natural endowments, its environment and ecosystems, including its wildlife and wild lands, to remain healthy, valued and protected. This also applies to climate-resilient economies and communities. These outcomes bode well for the goals of an inclusive green economy (IGE), which seeks to reconcile economic, social and environmental objectives to ensure a sustainable transformation and development path.

The inherent features of an inclusive green economy (IGE) can influence the macroeconomic policies of a country to adequately cater to environmental and social policy objectives. Thus, the two are mutually reinforcing. To resolve trade-offs between stability and development objectives, macroeconomic policies should be integrated into a long-term development strategy embodying environmental objectives. This facilitates the transformation of economic and social structures, with a view to ensuring a positive feedback loop in the investment–growth nexus and to engendering inclusive green growth. At the same time, the integrated systems framework of an inclusive green economy promotes multi-sectoral approaches and policy coordination, and further helps to inform decisions and actions on policy formulation and implementation, as well as on monitoring and evaluation. This promotes policy consistency and coherence within the national development planning framework, and ultimately enhances the outcomes of a macroeconomic framework while catering to the three dimensions of sustainable development in a balanced manner.

Fiscal policy, being the main tool for raising public revenue and making public expenditure disbursements, is a relevant policy tool for mobilizing resources that can advance investments in the green economy. For example, green fiscal reforms contribute to revenues in addition to creating fiscal space that promotes public investments in the green economy and social expenditure that benefits the poor. Moreover, taxes on resource extraction discourage the unsustainable use of resources while also creating incentives for more sustainable resource use. Furthermore, productivity and employment can be enhanced through the allocation of capital and other fiscal resources to priority sectors with the greatest potential for green transformation, value addition, higher forward and backward linkages and job creation.

The conduct of monetary policy can also have a direct impact on a key constraint on the transition to a green economy – finance, through access to resources (via credit and a deepening of financial institutions). The right balance is needed to control inflation and money

supply while allowing space for green economy financing, taking into account that the inflation target should be appropriate to the development of a given country. Moreover, credit and financial services can play an instrumental role in allowing enterprises, including small and medium-size and informal enterprises, to acquire and accumulate resources to finance the transition. In particular, preferential credit to priority sectors with high-employment and high–investment multipliers, and also to natural resource-based sectors, could foster a green economy.

Thus, Macroeconomic reforms provide an enabling environment that is needed to encourage and stimulate behavioral change and the implementation of actions that promote sustainable production and consumption and facilitate the development of an inclusive green economy. A country’s macroeconomic policies provide an important framework to foster an inclusive green economy by providing an environment that influences the willingness and ability of economic actors to invest in green activities. Governments can provide an enabling environment, for example by providing financing options, removing environmentally harmful subsidies and creating appropriate demand conditions for green industries and supporting local green activities.

 LEARNING OBJECTIVES

At the end of the course, participants will have a clear understanding of the following:

  •   The key concepts of inclusive green economy paradigm within macroeconomic frameworks;
  •   The overview and contemporary history of Africa’s macroeconomic policies;
  •   The implications of macroeconomic frameworks for development outcomes in Africa;
  •   Monetary policy and inclusive green economy;
  •   Fiscal policy and inclusive green economy;
  •   Challenges and opportunities in implementing macroeconomic policy reforms for inclusive green economy;
  •   Good practices and success factors in the implementation of macroeconomic policy reforms.