Energy-food-finance equation becomes the African elephant in Egypt’s pyramid

Energy-food-finance equation becomes the African elephant in Egypt’s pyramid

The inextricable link between finance, COP’s declared objectives and regional security is likely to frame a triangular narrative for November’s Sharm El-Sheikh agenda. With just a few weeks to go until the opening of the next session, press reports from the MENA region appear to remind western audiences in particular of the perils of ignoring the urgent needs of North Africa and the broader continent.

In an earlier report, we referenced one of the key concerns for the MENA region remains youth employment, the lack of which is widely recognised as a spark that ignited the 2010 Arab Spring .

News therefore that a number of countries in the region are seriously struggling as a result of energy inflation and the consequences of the Russian invasion of Ukraine, make the issue of finance even more critical. No more so than with the Tunisian budget deficit, the country that gave rise to the Arab Spring in the first place, according to news portal AGBI.

It’s also worth noting too that volatility exists in COP27’s own host nation; World Bank statistics suggest that nearly 29 per cent of Egypt’s population of 103 million lives below the poverty line. Food security – especially grain supplies from Ukraine – is seen as a critical influencing factor, requiring ongoing subsidies of US$53 million per month distributed to over 9 million families via a ration card system. A figure that will go up this month by a further $5 per family as a consequence of inflation, according to Reuters reports in July.

Not surprising therefore that the UN is reminding developed nations that they have failed to meet their promises to contribute US$100 Billion annually by 2020 to help developing countries implement sustainability programmes and adaptation measures.

The issue of finance is an increasing key message reiterated by Egypt’s UN Climate Change Champion, Mahmoud Mohiedin. Most recently the Arab Regional Forum for Finance Climate Action held by ESCWA in Beirut, stressed the need for financial aid to enable better sustainable practices in the region.

The message to the 22 Arab League members is therefore crystal clear; the goals of COP27 will only be possible through a careful financial strategy that accelerates better environmental stewardship, but at the same time, secures economic stability and reduces the risk of another Arab Spring, with the potential contagion of unrest spreading south through the Sahel region and beyond. This resonates especially with the Gulf countries, who help underpin a number of North African economies through investment and aid.

COP’s agenda will inevitably be influenced by events in Russia, at a time when its weaponising of energy appears paramount in their arsenal of munitions meted out on Ukraine’s western allies, especially those connected to Nord Stream 1 in Europe. The overall impact however has wider implications for the MENA region where the relationship between energy and employment opportunities is increasingly fractious.