Africa has not been adequately involved in the CBAM discussions – UNECA economist

Africa was not adequately involved in the discussions regarding the European Carbon Border Adjustment Mechanism (CBAM).

This view was expressed by Hanan Morsi, an economist and Deputy Executive Secretary of UNECA (the United Nations Economic Commission for Africa), during the annual meeting of the African Development Bank (AfDB), according to African Business.

“Part of our concern is that we were not part of the design process—we were not consulted, engaged, or given a say on implementation,” she noted.

According to Morsi, the region needs a broader discussion on how to ensure that climate-related trade measures do not undermine Africa’s industrialization and transformation goals.

The expert expressed the view that the CBAM reflects not only the EU’s environmental policy but also a more protectionist global trade environment.

“What is taking shape now is not just an environmental tool: climate regulation is increasingly turning into trade regulation, industrial policy, and competitiveness policy, and this has profound implications for Africa,” Morsi explained.

She added that although Africa’s share of global emissions is negligible, this has implications for the region’s exports and industrialization.

The expert suggested that in the future, African governments might consider introducing carbon-related taxes directly on producers.

Although the overall macroeconomic impact on the continent is expected to be quite low—the AfDB notes that CBAM-related goods account for only 6% of Africa’s total exports, and of those, only 2% are destined for the EU—certain sectors and countries are at significant risk.

For example, aluminum and steel producers, particularly in North Africa, who typically trade more with Europe, will face a significant increase in compliance costs. Mozambique exports nearly all of its aluminum production to the European market. The AfDB believes that CBAM could not only directly impact exports of these goods but also, over time, affect downstream products.

As a reminder, two years ago, South Africa criticized the UK’s plans to introduce a CBAM-style mechanism. South Africa noted that this move could violate WTO rules.