Mr. William Mensah, an Investment banker and non-Executive Director with Ecobank Capital has urged the government to capitalize on the economic benefits of green bonds.
This he asserted in an interview with the Vaultz Media. He further said that the government should not focus solely on the environmental benefits of green bonds.
Green bonds are fixed-income instruments with proceeds earmarked for new and existing projects that have environmental benefits. Currently, Ghana needs USD 22.6 billion to implement its Nationally Determined Contributions (NDCs).
Simply put, NDCs are national plans highlighting climate change actions. This includes climate related targets, policies and measures governments aim to implement in response to climate change. Also, such NDCs seek to achieve the global target set out in the Paris Agreement.
Mr. William Mensah discloses that there are a lot of people in Ghana who are trying to raise funds for green projects. However, such persons have to look for funding overseas because when they look internally no one seems to care about financing such projects.
Furthermore, he hints that because Africa is not a major polluter in the global sphere, much attention has not been given to climate change. In an article, National Institute of Environmental Sciences reveals that Africa contributes the least of any continent to global warming. Each year, Africa produces an average of just over 1 metric ton of the greenhouse gas carbon dioxide per person.
“If you think purely on the environment then it will be hard for you to make a case that Africa should… take climate change, seriously if when it comes to pollution we contribute next to nothing to the problem.
“We have to look at the economics of it [green bonds] and then the environment will be a bonus because… in the context of global pollution, Africa’s contribution…is negligible”.Mr. William Mensah
Reasons to Develop a Market for Green Bonds
Moreover, Mr. William Mensah mentions that the world is gradually moving to green. As such, it will not be prudent that Africa ignores green investments because it’s not a chief polluter.
“However, we can’t think that way because the world is moving… What we are failing to realize is that because focus is changing to green, there is a lot of opportunities in there.
“Industries…are shifting… If you don’t react early before, you realize the whole world has moved.
“So, we are not just doing it for the climate alone but it makes business sense for us to start focusing there. But, if we only think about it in terms of environment, we will miss it because we cannot make a strong case…we may not pick the right action.
“There are a lot of opportunities in…green…now… We have to look at it purely from the economics point of view”.Mr. William Mensah
For instance, he notes that the automobile industry is gradually shifting. Therefore, if there are green funds available, Ghana can capitalize on that to build the infrastructure to move into this shift. This, he posits, will be an economic decision not an environmental decision.
“We have brought Volkswagen to come and assemble internal combustion engines in Ghana…at a time where the automobile industry is moving to electric because of environmental factors.
“So, if we are thinking opportunities …we will rather be partnering someone who will…do a rapid charging network across the country and start…assembling electric vehicles.
“But the decision you will be making will be an economic decision not…environmental… Environmental benefit will be an additional benefit that we will get out of it”.Mr. William Mensah