Deputy Director, Capacity and Deployment AKADEMIYA2063 The Impact of Climate Change on African Economies and Opportunities for Agrifood System Transformation Dr. Mahamadou Tankari

#2024ReSAKSS #2024ATOR Outline 1) Introduction 2) Macroeconomic impacts of climate change 3) Agrifood system transformation and climate change 4) Opportunities for African food systems transformation under climate change 5) Conclusion 1

#2024ReSAKSS #2024ATOR Introduction • A slightly faster warming trend in Africa than the global average over 1991–2022 (WMO 2023) ❑The warming trend in Africa +0.3 °C per decade ❑Global warming trend one +0.2°C per decade • A change in precipitation patterns, a rise in sea level, and an increase in the frequency and intensity of extreme weather events • Economic damages due estimated at US$8.5 billion, and more than 110 million people affected in 2022 (WMO 2023) 2

#2024ReSAKSS #2024ATOR Introduction • Impacts may extend beyond agrifood systems • Climate change impacts African economies with one of the clearest impacts being the decline in crop yields • Disruption of food supply chains have negative implications for food and nutrition security, and livelihoods 3

#2024ReSAKSS #2024ATOR Macroeconomic impacts of climate change • Importance of agriculture and agricultural dependence on rainfall matter • Several climate change impact pathways: changes in productivity, employment, prices, and trade • Productivity changes can affect the entire economy 4

#2024ReSAKSS #2024ATOR Macroeconomic impacts of climate change Table 1: Share of Agriculture in GDP and Food Weight in five East Africa region countries 5

#2024ReSAKSS #2024ATOR Macroeconomic impacts of climate change Figure 1: GDP decreases associated with impacts of climate change 6

#2024ReSAKSS #2024ATOR Agrifood system transformation and climate change • Agrifood systems gradually develop and evolve amid the transformation of economies: ❖ Three stages: traditional, transitional, and modern (FAO 2021) • Impact of climate change depends on the characteristics of the agrifood systems • The contribution of the agrifood system to GDP and employment varies from one country to another: ❖ For instance, 48% and 77.2% in Ethiopia and 15.4% and 51.1% in Zambia (Diao et al. 2023a; Diao et al. 2023b) 7

#2024ReSAKSS #2024ATOR • Deficiencies act as barriers that limit opportunities to develop businesses and access services Agrifood system transformation and climate change • Dependence on climatic, biological, physical, and chemical processes makes vulnerable to climate shocks • Existing structural deficiencies amplify the effects of climate shocks on agrifood systems: ❖ Inadequate roads, power, irrigation, processing, storage, and marketing infrastructure 8

#2024ReSAKSS #2024ATOR • Climate change also has varied effects on actors within and between the different components of agrifood systems (FAO 2021): Agrifood system transformation and climate change ❖ Small-scale agricultural producers are more likely to be adversely affected than large-scale producers; ❖ Actors who are well connected to supply chains will overcome supply shortages and recover from disturbances more quickly than smallholders; ❖ poorest households will be more impacted by rising food prices with nonpoor households. 9

#2024ReSAKSS #2024ATOR Opportunities for African food systems transformation under climate change ✓ Modern technologies for climate change adaptation and mitigation ✓ Trade for supply and demand stabilization ✓ Digital solutions for weather information ✓ Social protection programs for workers in agrifood systems ✓ Adapted financial services for smallholders and agricultural and forest SMEs 10

#2024ReSAKSS #2024ATOR Conclusion • Factoring in climate change impact is crucial for sound policies in the context of the post-Malabo Agenda: ▪ Consider the macroeconomic effects of climate change, with an emphasis on agrifood systems ▪ Invest or repurpose the support to interventions for economic resilience and adaption to climate change • In Africa, climate change impacts are real • Extreme weather events are negatively impacting economies and displacing communities 11

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