The New Deal, introduced by the American president, Franklin D. Roosevelt in the 1930s, had a tremendous effect on the global political economy. For proponents of government interference in the capitalist economy, the New Deal has become a reference point for progressive thinking and policymaking. Today, the Green New Deal – so aptly named – has become an important part of the discussion around climate emergency.
For years now, science has told us that we are in a crisis brought on by centuries of industrial activities. We know that the threat of climate change is imminent and, in fact, African countries have – and will continue to – face the worst of it. The solution, therefore, lies in radically rethinking our systems. This rethinking spans the length of our daily lives, demanding a change on the fundamental base of our industrialised society: decarbonising the economy.
However, Africa cannot abdicate this rethinking to forces outside of the continent. Not just because we need to be the masters of our destiny, but because whatever solutions proposed at the global stage and in Western societies will view Africa as secondary and will widen the fissures of inequality and its devastating scale, which COVID-19 has unearthed and laid bare. The consequence is that we will extend the life of neoliberal economic outlooks that view Africa as extractive rather than productive and prioritises development aid over investment.
As global investment in sustainable energy outgrows investment into traditional energy, it is time for Africa to chart its own course by adopting, designing, and deploying African solutions that are aimed at solving our unique problems. Alitheia Capital’s investment in SparkMeter is a preparatory step in this direction. And the development of electric motorcycles by our portfolio company, MAX, shows the need for local innovation that yields triple results: financial, social, and environmental. However, this also requires that we find and unlock domestic sources of private equity funds in Africa to prioritise investment into small, essential businesses on the continent.
I am a capitalist. I believe in the ability of capitalism to cause fundamental changes by engaging with market forces. However, the excesses of capitalism must be engaged with and, if necessary, regulated to protect the interest of the everyday man who is far removed from the machinations of politics, power, and wealth. It is why I am a proponent of impact investment as an alternative to development aid and traditional investment. Impact investment intersects with both as it allows a financial and social return on investments that are critical for social development and economic growth. In working towards a Green New Deal for Africa, impact investment must be centered as a vehicle to drive funds into essential and sustainable businesses. And Africa’s many entrepreneurs also have a central role to play in this grand scheme.