STATEMENT BY INCOMING V20 PRESIDENCY IN OUTREACH WORKSHOP
HON. DEPUTY MINISTER OF FINANCE
JOHN AMPONTUAH KUMAH, MP
THURSDAY, 28TH APRIL 2022
MOVENPICK AMBASSADOR HOTEL, ACCRA
I wish to extend the warmest regards of the Hon. Minister, Ken Ofori-Atta who is currently at Washington DC for official business.
I am honoured to be present with you today at this important event, which is an Outreach Workshop to lay the foundation for Ghana’s presidency as Climate Vulnerable Forum (CVF). I would once again, want to welcome the delegation from the CVF and V20 for the effort being made to ensure a smooth transition of the CVF presidency from Bangladesh to Ghana. As incoming President, we would like to assure the CVF Secretariat and Members of the CVF that Ghana is committed to increase the number of members over the next two years (2022-2024) as well as work towards expanding the portfolio of the CVF.
Ladies and Gentlemen, the recent IPCC report confirms that Sub-Saharan Africa is one of the most vulnerable to the impacts of global warming; and yet the region receives woefully inadequate adaptation and resilience-enabling financing from the Global North which is responsible for 92% of the excess carbon emissions responsible for climate change; and is expected, according to the United Nations Framework Convention on Climate Change, the developed countries are to provide new and additional financial resources to meet the agreed full costs incurred by developing country Parties in complying with their climate action obligations
According to the State of the Climate in Africa 2020 report, investment in climate adaptation for sub-Saharan Africa would cost between US$30 billion to US$50 billion each year over the next decade, or roughly two to three per cent of GDP.
Additionally, the GDP exposure of African nations vulnerable to extreme climate patterns is projected to grow from US$895 billion in 2018 to about US$1.4 trillion in 2023 (nearly half of the Continent’s GDP) and Africa is projected to need $3 trillion in mitigation and adaptation by 2030 to implement its National Determined Contributions (NDCs).
Climate vulnerabilities are a threat multiplier for the vulnerable countries, impacting the cost of capital and debt levels, exposing our economies and communities. The climate impacts also land hard on people in the V20 countries due to the 98% financial protection gap that leads to a much longer recovery timeframe than developed countries. The recovery is also incomplete leading to loss and damages which diverts crucial financial resources from the national budget given limited fiscal space.
We recognize that V20 representation in global governance decisions remains weak and continues to result in outcomes that do not go far enough to protect the interests of the world’s most vulnerable groups or the planet. This is the period we need to establish specific forums and strengthen engagements with channels of cooperation between the IMF and MDBs with the V20 to deliver funding and liquidity to deal with the current economic crises.
Ladies and Gentlemen, we anticipate bringing forward to new heights V20 initiatives such as the Sustainable Insurance Facility to reduce the financial protection gap for key actors along the supply chains, the Accelerated Financing Mechanism to reduce the cost of capital and the Global Risk Modelling Alliance to make available risk and resilience analytics, the Carbon Financing Programme (CFP), the Loss and Damage financing mechanism to provide meaningful avenues to deal with this risk, the Climate Prosperity Plans, moving from vulnerability to resilience to prosperity. We also look forward to continued partnership with the G7 and G20 through the InsuResilience Global Partnership to reduce the financial protection gap due to growing climate-fuelled risks.
Distinguished colleagues, as the incoming Presidency of the V20, Ghana recognizes that the current architecture does not cater for the needs of the climate vulnerable economies and we must endeavour to correct this. Building on the success of the Presidency of Bangladesh that has developed the first of the many Climate Prosperity Plans coming from the V20, we look forward to developing ours and more importantly, to spur and mobilize international investment through market creation and increased participation, technology transfer and economic partnerships, for accelerated action.
Ladies and Gentlemen, Ghana as a member of United Nations Framework Convention on Climate Change (UNFCCC) recognizes its vulnerability to climate risks and the challenges climate change present for economic development. We are all witnesses to the impact of erratic rainfall on our agricultural sector especially when it manifests in droughts, its impact on the generation of hydroelectric power; we are also aware of the occurrences of seasonal flooding that affect our cities and villages and the toll on life and property, and the destruction of our physical infrastructure; we have witnessed how coastal villages and coastal urban communities are gradually being washed away due to sea level rise.
These challenges have negative implications for economic growth, fiscal management, and macroeconomic stability, and if no action is taken now, the cost of doing it in future will be prohibitive and counterproductive to our quest for rapid socio-economic development.
Ghana joined the Paris Agreement with the aim of strengthening global response to the threat of climate change. The nation’s response to climate change plays a key role in achieving a transformation agenda, medium to long term national development objectives as well as the global Sustainable Development Goals. As part of the commitment to the Paris Agreement, Ghana has updated its Nationally Determined Contributions which defines the country’s response to climate change, highlighting policies, actions and targets for low carbon emission.
Consequently, Ghana would need between US$9.3 billion to US$15.5 billion investment to implement its 47 nationally determined contribution programme from 2021 to 20230, which is expected to build the resilience of Ghanaians, generate absolute green gas emission reductions of 64 million tons of carbon equivalent (64 MtCO2e) and create over one million descent jobs. Ghana will need an additional US$3 million every two years to support coordination and the regular international reporting of the nationally determined contributions.
Ghana intends to fund the Nationally Determined Contributions domestically through the National Budget, Private Sector, and Corporate Social Responsibility as well as Externally, through Bilateral sources including Carbon market, International Private Sector and Multilateral sources.
The Nationally Determined Contributions do not just occupy the margins of the development discourse but are at the very root of the Paris Agreement and the achievement of the long-term goals to reduce national emissions and adapt to the impacts of climate change.
Distinguished Ladies and Gentlemen, I feel honoured to have the opportunity to steer the V20 towards the realization of its Vision 2025, as well as building on the achievements of previous Presidencies, and I seek your support and cooperation over the next 2 years. I do believe it may be instructive to begin by developing our very own Climate Prosperity Plan or updating our medium-term development plans to be climate resilient and prosperous.
Ladies and Gentlemen, on that note, I wish us a successful workshop.