## 2. Adapting to Climate Change in Sub‑Saharan Africa

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### Links between climate change and COVID‑19; regional vulnerability
- Fiscal stimulus supporting recovery from the pandemic can be designed to simultaneously address climate change.
- Climate change is a threat multiplier for pandemics: destruction of the environment and biodiversity makes pandemics more likely while pollution and other man‑made factors driving climate change weaken human health and raise vulnerability to viruses and other diseases.
- Sub‑Saharan Africa is the region in the world most vulnerable to climate change: rising temperatures, rising sea levels, and rainfall anomalies are increasing the frequency and intensity of natural disasters and are markedly transforming the region’s geography.
- Recent natural disasters and risks cited:
  - Cyclones Idai and Kenneth; ongoing locust outbreaks in eastern Africa; droughts in southern and eastern Africa threatening millions; Sahel desertification contributing to conflicts and mass migration.
- Vulnerability indicators (World Risk Index; Notre Dame Global Adaptation Index) suggest most sub‑Saharan African countries have low adaptive capacities, including a lack of economic, governance, and social readiness needed for adaptation.
- Adapting to climate change is critical to safeguarding improvements in incomes, education, and health over the past three decades, but implementation is constrained by limited capacity and financial resources.

### Main findings and headline numbers
- Financing adaptation will be more cost‑effective than frequent disaster relief.
  - Adaptation for sub‑Saharan Africa is estimated at US$30–50 billion (2–3 percent of regional GDP) each year over the next decade.
  - Savings from reduced post‑disaster spending could be many times the cost of upfront investment in resilience and coping mechanisms.
  - Adaptation would also benefit other development areas (for example, resilience to pandemics), boost growth, reduce inequalities, and sustain macroeconomic stability.
- Stepped up financial support from development partners, beyond disaster relief, targeting resilience building and bolstering coping mechanisms will be critical.
  - Containing COVID‑19 is reducing fiscal space and raising debt vulnerabilities in sub‑Saharan Africa.
  - Macroeconomic insurance (climate funds, state‑contingent bonds) has been difficult for the region’s countries to access, given large risk premiums—partly reflecting governance issues that raise investors’ risk aversion.
- Observed climate impacts in sub‑Saharan Africa since the turn of the century:
  - At least 1,000 deaths annually.
  - 13 million people seriously affected (injured, left homeless, food insecure, or lacking water and sanitation) annually.
  - US$520 million in direct economic damages annually.
  - One‑third of the world’s droughts occur in sub‑Saharan Africa; frequency of storms and floods is growing fastest in this region.

### Short‑run temperature and precipitation effects (empirical results)
- Economic activity in a given month can shrink by 1 percent when the average temperature is 0.5°C above that month’s 30‑year average.
  - This impact is 60 percent larger than the average for emerging market and developing economies in other regions.
- Provincial satellite nightlights proxy results:
  - In sub‑Saharan Africa for a given month, a 0.5°C increase in temperature from that month’s 30‑year average corresponds to a 2.1 percent reduction of nightlights.
  - Translating that effect using elasticity estimates implies a 1 percent decline in monthly real GDP for that province.
  - A 10‑millimeter deviation in precipitation relative to the 30‑year average for that month could reduce nightlights by 0.8 percent, implying a reduction in real GDP of 0.4 percent; if the shock hits during peak growing season, the effect could persist for more than a year.
  - More than half the provinces across sub‑Saharan African countries already experience these magnitudes of temperature or rainfall fluctuations in a given month.

### Medium‑term and lasting impacts of natural disasters
- Natural disasters, especially droughts, have lasting adverse economic consequences.
  - Medium‑term annual economic growth can decline by 1 percentage point with the occurrence of one additional drought.
    - This impact is about eight times that in emerging market and developing economies in other regions.
  - Each additional flood takes about half the toll on medium‑term growth.
- Disaster intensity matters much more than frequency.
- Post‑disaster fiscal and external pressures:
  - Reduced economic activity lowers tax revenues while spending needs accelerate for relief and rebuilding.
  - Post‑disaster foreign financial assistance or remittances seldom fully offset strains on external positions from reduced agricultural exports and increased imports for reconstruction.
- Human capital losses from deaths, malnutrition, or lower school enrollment after a disaster are unrecoverable and amplify long‑run costs.

### Inequality, poverty, and food security
- Climate change is exacerbating existing inequalities in sub‑Saharan Africa.
  - Almost half of the population lives below the poverty line and depends on weather‑sensitive activities such as rain‑fed agriculture, herding, and fishing.
  - Limited financial buffers and low levels of education and health care impede adaptation.
- Empirical household findings:
  - In Ethiopia, Malawi, Mali, Niger, and Tanzania, food insecurity increases by 5–20 percentage points with each flood or drought.
  - Deteriorations in health and children’s school attendance worsen longer‑term income and gender inequalities.
- Rural‑to‑urban migration from weather shocks increases urban poverty risk; conflicts spurred by these developments would further depress growth and raise inequalities.

### Household‑ and sector‑level resilience measures (evidence and priorities)
- Measures that can reduce the chance of post‑shock food insecurity by 30 percentage points (household survey averages):
  - Higher incomes from diversified sources and access to finance.
  - Solid mobile phone coverage and availability to widen early warning systems and information on food prices and weather.
  - More robust homes and structures, good sanitation and drainage to preserve earning capacity and prevent disease.
  - Improved health care and education to raise productivity and income potential.
- Reducing weather sensitivity of crops:
  - Use of improved seeds, fertilizer and insecticide, protection against erosion, irrigation, and access to finance mitigate crop damage (household survey analysis in Ethiopia and Rwanda).
  - Policy directions: accelerate research and development in improved seeds and livestock, shift from monocultures toward diversified agroforestry production, raise farmer awareness, and facilitate access to resilience‑enhancing measures.
- Social assistance and insurance:
  - Examples: Kenya’s Hunger Safety Net Program; Ethiopia’s Productive Safety Net Program.
  - Insurance and disaster risk financing can be critical but often rely on government subsidies and improvements in financial literacy.

### Priority structural reform areas by climate effect
- Droughts:
  - Increase access to finance, irrigation, drinking water, and electricity (electricity powers irrigation and pumps).
  - These factors are complementary: electricity and access to finance facilitate building and maintaining irrigation and water infrastructure.
  - Regression result: the negative impact on per capita annual medium‑term growth in sub‑Saharan African countries is reduced by almost 0.5 percentage points if gaps are closed relative to the average for emerging market and developing economies in access to electricity (given existing irrigation and pumping systems) and to finance.
  - Hydropower generates one‑fifth of sub‑Saharan Africa’s electricity and is susceptible to droughts; near‑term solutions include building more reservoirs, dams, and power plants; long‑term solutions include decentralization of renewable energy sources (geothermal, solar, wind).
- Storms and floods:
  - Accelerate improvements in health and education outcomes, access to finance, telecommunications, use of machines, and weather‑resilient infrastructure to limit economic damage and support recovery.
  - Health care reduces the medium‑term growth impact of floods and storms by lowering out‑of‑pocket expenditures, facilitating quicker return to work, and, along with education, improving productivity and income potential.

### Financing adaptation: costs, savings, instruments, and international support
- Estimated adaptation financing needs: US$30–50 billion (2–3 percent of regional GDP) annually over the next decade.
- Post‑Disaster Needs Assessments analysis:
  - Up‑front investment in resilience and coping mechanisms results in long‑term savings measured by reduced disaster relief spending that are almost three times the up‑front investment cost for droughts.
  - For storms, up‑front investment yields about 12 times the up‑front investment cost in long‑term savings.
- Dynamic general equilibrium model findings:
  - Public debt levels rise by less than 25 percent of the scenario where resilience is not built, even when resilient infrastructure is 25 percent more expensive than regular infrastructure.
  - Post‑disaster widening of inequality is markedly contained when resilience is built.
  - Efficiency gains in construction, operations, and management could reduce the cost of building resilient infrastructure.
- Some non‑infrastructure adaptation measures are relatively affordable and quick to implement:
  - Programs supporting farmers in purchasing improved seeds and other crop‑protection measures.
  - Early warning systems and swift, targeted social assistance (example: Ethiopia spent only 1.2 percent of GDP annually and achieved remarkable results for households facing food insecurity).
- Fiscal and financing constraints:
  - Many countries face moderate to high debt vulnerabilities, aggravated by COVID‑19 containment costs.
  - Countries are pursuing revenue mobilization (including environmental taxes) and spending‑efficiency reforms, but progress is limited.
  - Some countries have created disaster funds (example: Mozambique) with part financing from annual budget allocations.
  - Regional risk‑sharing: African Risk Capacity had 34 member countries as of March 2020.
  - Macroeconomic insurance products and state‑contingent bonds have been difficult to use due to large risk premiums reflecting governance issues.
- Role of the international community and institutions:
  - Development partners should expand support beyond disaster relief to target resilience building and coping mechanisms (including international insurance products).
  - Estimates of financing needs for developing countries far exceed the pledged US$25 billion of international public finance for adaptation.
  - Development partner–financed resilient infrastructure achieves the same welfare level as frequent disaster relief, with at least a 30 percent cost savings.
  - International financial institutions can unlock finance pools through loans, guarantees, and risk reduction.
  - IMF support examples:
    - US$130 million in support to Comoros and Mozambique through the Rapid Credit Facility after cyclones Idai and Kenneth.
    - US$40 million to Malawi by augmenting the existing Extended Credit Facility.
  - Grant financing (model example: grants covering 80 percent of resilient infrastructure investment) would considerably reduce the impact on public debt.

### Case studies and sectoral successes (selected examples)
- Agriculture and productivity:
  - Ethiopia: rust‑resistant wheat varieties increased yields by 30–40 percent for some farmers; seeds were distributed to smallholder farmers and multiplied/distributed by farmers to neighbors.
  - Chad: Zaï pits to capture rainwater and agroforestry to reduce erosion.
  - Ghana: multipronged cocoa drought resistance program (improved seed varieties, shade trees, irrigation, rehabilitation, farmer awareness).
  - Mozambique: global pilot testing new heat‑tolerant bean seeds.
- Risk sharing:
  - Ethiopia’s Productive Safety Net Program combined cash/in‑kind transfers with bank accounts for transfers and, with improved seeds, food shortages fell from 22 percent to 10 percent during 2011–16.
- Renewable energy and jobs:
  - Kenya: off‑grid systems (mini‑grids and stand‑alone solar) raised electricity access from about 40 percent to 70 percent during 2012–17; pay‑as‑you‑go solar model produced 10 times more jobs than traditional utilities.
- Urban resilience:
  - Mozambique (Beira port): upgraded primary drainage, contingency planning, solar‑powered street lighting, and emergency restoration of transport/logistics services helped resume port operations three days after cyclone Idai; rail and road connections operational within two weeks.

### Macroeconomic model simulations: gains from resilient infrastructure
- Public investment scaled up by 1 percent of GDP annually in years 1–5 in either standard infrastructure or resilient infrastructure; a natural disaster occurs in year 6 calibrated to yield a fall in output of 1 percent under the standard infrastructure scenario.
- Key simulated outcomes:
  - Output decline from the disaster is considerably lower when the country invested in resilient infrastructure versus standard infrastructure.
  - Post‑disaster consumption inequality widens less with resilient infrastructure; resilient infrastructure shelters poor households from consumption cuts.
  - Although resilient infrastructure requires faster public debt accumulation before a disaster (because it is more costly), rebuilding costs after a disaster are limited, reducing debt pressures relative to the scenario with standard infrastructure.
  - Grant financing covering a large share of resilient infrastructure investment would considerably reduce the impact on public debt.

*International Monetary Fund. April 2020. "2. Adapting to Climate Change in Sub‑Saharan Africa" (chapter).*

### INTRODUCTION

### INTRODUCTION

### Links between climate change and COVID-19
- Fiscal stimulus supporting recovery from the pandemic can be designed to simultaneously address climate change.
- Climate change is a threat multiplier for pandemics: destruction of the environment and biodiversity makes pandemics more likely while pollution and other man-made factors driving climate change weaken human health and raise vulnerability to viruses and other diseases.

### Regional vulnerability and recent events
- Sub-Saharan Africa is the region in the world most vulnerable to climate change: rising temperatures, rising sea levels, and rainfall anomalies are increasing the frequency and intensity of natural disasters and are markedly transforming the region’s geography.
- Recent natural disasters cited include cyclones Idai and Kenneth; ongoing locust outbreaks in eastern Africa; droughts in southern and eastern Africa that threaten the lives of millions; and the Sahel’s desertification contributing to conflicts and mass migration.
- Indicators on vulnerabilities (World Risk Index; Notre Dame Global Adaptation Index) suggest most sub-Saharan African countries have low adaptive capacities, including a lack of economic, governance, and social readiness needed for adaptation.

### Development, resilience, and policy trade-offs
- Economic development has brought progress, but resilience and coping mechanisms across sub-Saharan Africa remain limited due to structural factors and heavy reliance on rain-fed agriculture.
- Adapting to climate change is critical to safeguarding improvements in incomes, education, and health across the past three decades.
- Adaptation will be especially challenging given countries’ limited capacity and financial resources; implementing all recommended reforms while managing competing development needs is beyond the region’s human and financial capacity.
- The chapter examines which reform areas sub-Saharan African policymakers should prioritize, using big data, econometric analysis, and event studies to assess impacts on growth and inequality, and highlighting policy areas and financing implications.

### Main Findings
- Financing adaptation will be more cost-effective than frequent disaster relief.
  - Adaptation for sub-Saharan Africa is estimated at US$30–50 billion (2–3 percent of regional GDP) each year over the next decade.
  - Savings from reduced post-disaster spending could be many times the cost of upfront investment in resilience and coping mechanisms.
  - Adaptation would also benefit other development areas (for example, resilience to pandemics), boost growth, reduce inequalities, and sustain macroeconomic stability.
- Stepped up financial support from development partners, beyond disaster relief, targeting resilience building and bolstering coping mechanisms will be critical.
  - Containing COVID-19 is reducing fiscal space and raising debt vulnerabilities in sub-Saharan Africa.
  - Macroeconomic insurance (climate funds, state-contingent bonds) has been difficult for the region’s countries to access, given large risk premiums—partly reflecting governance issues that raise investors’ risk aversion.
- Climatic change impacts in sub-Saharan Africa are pronounced:
  - Annually responsible for at least 1,000 deaths, 13 million people seriously affected (injured, left homeless, food insecure, or lacking water and sanitation), and US$520 million in direct economic damages since the turn of the century.
  - One-third of the world’s droughts occur in sub-Saharan Africa; frequency of storms and floods is growing fastest in this region.
- Empirical results on short-run temperature effects:
  - Economic activity in a given month can shrink by 1 percent when the average temperature is 0.5°C above that month’s 30-year average.
  - This impact is 60 percent larger than the average for emerging market and developing economies in other regions.
- Natural disasters have lasting impacts, especially droughts:
  - Medium-term annual economic growth can decline by 1 percentage point with the occurrence of one additional drought.
  - This impact is about eight times that in emerging market and developing economies in other regions.

### Household- and sector-level resilience measures
- Climate change is threatening food security of the poor in both rural and urban areas; reducing this risk requires improving resilience of agricultural production and households and prioritizing measures in government budgets with cross-ministry coordination.
- Targeted social assistance and insurance are key to helping populations cope after a shock.
- Household-survey-based findings:
  - Improved seeds, insecticide, fertilizer, anti-erosion measures, irrigation, and access to finance are critical for building resilience in agricultural production.
  - Better access to finance and telecommunications (which improve accessibility to early warning systems), robust housing, sanitation, and education boost household resilience and could reduce the chances of post-shock food insecurity by 30 percentage points.

### Priority structural reform areas (by type of climate effect)
- For droughts:
  - Increasing access to finance, irrigation, drinking water, and electricity (which powers irrigation and pumps) is essential to minimize economic damage.
- For storms and floods (which can also contribute to the spread of pandemics):
  - Accelerating progress in improving health and education outcomes, access to finance, telecommunications, and the use of machines and weather-resilient infrastructure limits economic damage and supports recovery efforts.

### Economic impact: mechanisms and magnitudes
- Climate change reduces growth by taking lives, depressing productivity (including deteriorated worker health and education), destroying housing and infrastructure, and dampening hydroelectric production.
- Agricultural output suffers most via shrinking yields and reduction in arable lands, placing food security at risk; spillovers to manufacturing, wholesale and retail trade, and tourism further weaken economies.
- Using satellite-recorded nightlights as a proxy for economic activity, provincial-level analysis finds:
  - In sub-Saharan Africa for a given month, a 0.5°C increase in temperature from that month’s 30-year average corresponds to a 2.1 percent reduction of nightlights.
  - Translating that effect using elasticity estimates implies a 1 percent decline in monthly real GDP for that province.
  - A 10-millimeter deviation in precipitation relative to the 30-year average for that month could reduce nightlights by 0.8 percent, implying a reduction in real GDP of 0.4 percent; if the shock hits during peak growing season, the effect could persist for more than a year.
  - More than half the provinces across sub-Saharan African countries already experience these magnitudes of temperature or rainfall fluctuations in a given month.
- Natural disasters, especially droughts, have lasting adverse economic consequences:
  - Foreign financial assistance, remittances, and reconstruction often offset the negative near-term impact on economic activity, which is substantial for droughts and extreme storms like cyclones.
  - Human capital losses from deaths, malnutrition, or lower school enrollment after a disaster are unrecoverable.
- Country-level panel regression findings on five-year GDP growth:
  - A significant negative impact of natural disasters on medium-term growth—especially droughts.
  - The occurrence of one additional drought in a sub-Saharan African country can reduce its medium-term annual economic growth by one percentage point, in addition to any lasting level effects.
  - Each additional flood takes about half the toll on medium-term growth.

*International Monetary Fund. April 2020. "2. Adapting to Climate Change in Sub-Saharan Africa" (chapter).*

### 2017. EMDE = emerging market and developing economies;

### 2. ADAPTING TO CLIMATE CHANGE IN SUB-SAHARAN AFRICA

### Impact of Natural Disasters on Growth and Macroeconomic Indicators
- Disaster intensity matters much more than frequency (consistent with Cavallo and others 2013 and Fomby, Ikeda, and Loayza 2013).
- The larger impact of intensity may reflect increasing intensities when economies are hit by disasters before recovery from prior events.
- Challenges to economic growth are compounded by widening fiscal and current account deficits and corresponding pressures on public debt and international reserves after a natural disaster.
- Reduced economic activity translates into lower tax revenues while spending needs accelerate for post-disaster relief and rebuilding damaged infrastructure.
- Post-disaster foreign financial assistance or remittances seldom fully offset strains on external positions from reduced agricultural exports and increased imports for reconstruction.
- Relative impacts illustrated in figures:
  - Figure 2.7: Medium-term impact of one additional natural disaster on growth distinguishes Frequency and Intensity for Droughts and Floods; categories include World, EMDEs, SSA, Sahel (figure annotations cited).
  - Figure 2.6: Evolution of Real GDP Growth around Disruptive Droughts, Floods, and Storms, 1990–2018 (disaster definition: fatalities plus 0.3 times the affected persons exceeds 0.01 percent of the population).
  - Figure 2.8: Evolution of macroeconomic indicators around disruptive events shows movements in Current Account Deficit (percent of GDP) and Fiscal Deficit (percent of GDP) comparing Year t vs. average of t-1 and t-2 and average of t+1 and t+2 vs. Year t.

### Amplified Inequalities
- Climate change is exacerbating existing inequalities in sub-Saharan Africa.
- Almost half of the population lives below the poverty line and depends on weather-sensitive activities such as rain-fed agriculture, herding, and fishing for their livelihoods (Figure 2.9).
- Limited financial buffers and low levels of education and health care impede adaptation, raising vulnerabilities to food insecurity, income losses, and unemployment.
- Empirical finding: in Ethiopia, Malawi, Mali, Niger, and Tanzania, food insecurity increases by 5–20 percentage points with each flood or drought.
- Associated deteriorations in health and children’s school attendance worsen longer-term income and gender inequalities.
- Increased urban poverty risk due to rural-to-urban migration from weather shocks; Sahel cited as evidence.
- Conflicts spurred by these developments would further depress growth and raise inequalities (Burke and others 2009; Hsiang, Meng, and Cane 2011; April 2019 REO: Sub-Saharan Africa, Chapter 2).

### Adaptation Strategies: General Considerations
- Adaptation and mitigation are both essential; adaptation plays a greater role for sub-Saharan Africa due to:
  - Rapid implementation of adaptation strategies generating jobs supporting economic recovery from the COVID-19 pandemic.
  - Economies’ particular dependence on climate-sensitive sectors.
  - The region’s limited influence on global emissions relative to advanced and large emerging market economies.
- Mitigation options noted: carbon taxes, phasing out energy subsidies, transitioning to green energy sources, reforestation for carbon capture, and financial regulations limiting investment in polluting capital.
- Effective adaptation requires:
  - Strong coordination across Ministries of Finance, Agriculture, Education, Environment, Health, and infrastructure agencies, and with development partners.
  - Developing comprehensive adaptation strategies and assessing multiyear expenditure frameworks for inclusion of adaptation policies.
  - Reviewing project selection and prioritization criteria to implement the most impactful combination of resilience-building projects.
  - Addressing financing challenges and informational asymmetries related to access to finance for households and businesses and public financing of adaptation.

### Safeguarding Food Security
- Weather-related crop damage can plunge poor households into food insecurity; subsistence farmers suffer directly while shortages elevate food prices.
- Strengthening household resilience, improving coping mechanisms, and bolstering post-shock support are central.
- Empirical analysis (household surveys for Ethiopia, Malawi, Mali, Niger, and Tanzania) finds that the following factors, on average, can potentially reduce the chance of food insecurity by 30 percentage points (Figure 2.10):
  - Higher incomes from diversified sources and access to finance enable households to buy food when prices rise and invest in resilience ahead of shocks.
  - Solid mobile phone coverage and availability broaden the reach of early warning systems and information on food prices and weather (even via text or voice messages), informing planting, irrigation, and fertilization decisions.
  - More robust homes and other structures facilitate food storage; combined with good sanitation and drainage, they preserve earning capacity by preventing injuries and the spread of disease and ensuring safe drinking water.
  - Improved health care and education raise productivity and income potential and facilitate better-informed decision-making.
- Reducing the weather sensitivity of crops helps protect the food supply:
  - Household survey analysis in Ethiopia and Rwanda finds use of improved seeds, fertilizer and insecticide, protection against erosion, irrigation, and access to finance can mitigate crop damage (Figure 2.11).
  - Policy directions: accelerate research and development in improved seeds and livestock, shift from monocultures toward diversified agroforestry production, raise farmers’ awareness, and facilitate access to resilience-enhancing measures.
- Social assistance and insurance:
  - Examples: Kenya’s Hunger Safety Net Program targeting drought-prone households and Ethiopia’s Productive Safety Net Program have supported poverty reduction.
  - Insurance and disaster risk financing can be critical but often rely on government subsidies and improvements in financial literacy.

### Shaping Broad-Based Adaptability
- Economy-wide resilience requires combinations of reforms targeted to specific climate challenges:
  - Strong macroeconomic, institutional, and structural policies plus measures ensuring food security are necessary.
  - High resilience and strong coping mechanisms could avoid disastrous results altogether (Acevedo and Noah, forthcoming).
- Policy emphasis on framing complementary structural reform areas where improvements yield substantial gains in containing climate change impacts on growth and inequality.

### Droughts: Targeted Measures
- Improved irrigation systems and broader access to drinking water, electricity, and finance support higher economic growth and poverty reduction during prolonged dry spells and water shortages.
- These factors are complementary: electricity powers irrigation systems and deep tube-well pumps, and access to finance facilitates building and maintenance of infrastructure.
- Regression analysis result: the negative impact on per capita annual medium-term growth in sub-Saharan African countries is reduced by almost 0.5 percentage points if gaps are closed relative to the average for emerging market and developing economies in access to electricity (given existing irrigation and pumping systems) and to finance (Figure 2.12).
- Energy considerations:
  - Hydropower generates one-fifth of sub-Saharan Africa’s electricity and is susceptible to droughts.
  - Near-term solutions: building more reservoirs, dams, and power plants.
  - Long-term solutions: decentralization of renewable energy sources (geothermal, solar, wind) to support electrification and job creation.

*International Monetary Fund | APRIL 2020*

### Box 2.2). Reduced reliance on hydroelectricity also

### Box 2.2. Case Studies: Adaptation Strategies Taken in Sub-Saharan Africa

### Overview
- Responding to climate change involves mitigation and adaptation. Adaptation measures include (i) resilience building (reducing exposure and vulnerability to climate change), and (ii) improving coping mechanisms (measures that help buffer the impact from climate change, such as disaster relief).
- Financing adaptation in sub-Saharan Africa is estimated at US$30–50 billion (2–3 percent of regional GDP) each year over the next decade.

### Floods and Storms: Policies and Impacts
- Health care reduces the medium-term economic growth impact of floods and storms by:
  - reducing out-of-pocket health care expenditures, safeguarding household savings;
  - facilitating a quicker return to work; and
  - along with education, improving productivity, income potential, gender inequalities, and better-informed decision-making (Hallegatte, Rentschler, and Rozenberg 2019).
- Access to finance helps households and businesses invest in weather-resilient infrastructure and provides buffers after a shock.
- Mechanization (use of machinery) improves agricultural resilience by facilitating creation of dikes, erosion protection, and deeper seed planting.
- Widening mobile network coverage, especially in rural areas, supports access to early warning systems.
- Urban weather-resilient infrastructure (extensive drainage, broad beaches) protects cities from coastal flooding and erosion; example: Beira port (Mozambique) resumed operations three days after cyclone Idai, rail and road connections operational within two weeks.

### Financing Adaptation: Costs, Savings, and Instruments
- Estimated adaptation financing needs: US$30–50 billion (2–3 percent of regional GDP) annually over the next decade.
- Post-Disaster Needs Assessments analysis:
  - Up-front investment in resilience and coping mechanisms results in long-term savings measured by reduced disaster relief spending that are almost three times the up-front investment cost for droughts.
  - For storms, up-front investment yields about 12 times the up-front investment cost in long-term savings.
- Dynamic general equilibrium model results:
  - Public debt levels rise by less than 25 percent of the scenario where resilience is not built, even when resilient infrastructure is 25 percent more expensive than regular infrastructure.
  - Post-disaster widening of inequality is markedly contained when resilience is built.
  - Efficiency gains in construction, operations, and management could reduce the cost of building resilient infrastructure.
- Some non-infrastructure adaptation measures are relatively affordable and quick to implement, for example:
  - Programs supporting farmers in purchasing improved seeds and other crop-protection measures.
  - Early warning systems and swift, targeted social assistance (example: Ethiopia spent only 1.2 percent of GDP annually and achieved remarkable results for households facing food insecurity).
- Fiscal and financing constraints:
  - Many countries face moderate to high debt vulnerabilities, aggravated by COVID-19 containment costs.
  - Countries are pursuing revenue mobilization (including environmental taxes) and spending-efficiency reforms, but progress is limited.
  - Some countries have created disaster funds (example: Mozambique) with part financing from annual budget allocations.
  - Regional risk-sharing: African Risk Capacity had 34 member countries as of March 2020.
  - Macroeconomic insurance products and state-contingent bonds have been difficult to use due to large risk premiums reflecting governance issues.
- Role of international community and institutions:
  - Development partners should expand support beyond disaster relief to target resilience building and coping mechanisms (including international insurance products).
  - Estimates of financing needs for developing countries far exceed the pledged US$25 billion of international public finance for adaptation.
  - Development partner–financed resilient infrastructure achieves the same welfare level as frequent disaster relief, with at least a 30 percent cost savings.
  - International financial institutions can unlock finance pools through loans, guarantees, and risk reduction. The IMF provided:
    - US$130 million in support to Comoros and Mozambique through the Rapid Credit Facility after cyclones Idai and Kenneth.
    - US$40 million to Malawi by augmenting the existing Extended Credit Facility.
  - IMF and World Bank joint work example: Seychelles’ Climate Change Policy Assessment.

### Case Studies and Successful Adaptation Strategies
- Raising agricultural productivity:
  - Ethiopia: Developing rust-resistant wheat varieties countering wheat rust increased yields by 30–40 percent for some farmers. Seeds were distributed to smallholder farmers and multiplied/distributed by farmers to neighbors.
  - Chad: Farmers improve water retention using Zaï (digging small pits to capture rainwater) and practice agroforestry to reduce erosion during heavy rainfalls.
  - Ghana: Multipronged approach to improve cocoa drought resistance—distributing improved seed varieties; planting non-cocoa trees for shade; improving irrigation systems and cocoa plant fertility; rehabilitating aged and disease-infected farms; raising farmer awareness about improved cultivation methods.
  - Mozambique: Global pilot to test new heat-tolerant bean seeds developed by the International Center for Tropical Agriculture.
- Risk sharing (Ethiopia):
  - Productive Safety Net Program providing cash and in-kind transfers helped improve financial inclusiveness by requiring bank accounts for transfers. Combined with improved seeds, food shortages fell from 22 percent to 10 percent during 2011–16.
- Renewable energy investment (Kenya):
  - Aiming for universal energy access by 2022 using off-grid systems (mini-grids and stand-alone solar systems). Electricity access rate increased from about 40 percent to 70 percent during 2012–17.
  - Pay-as-you-go solar model uses mobile money technologies and, given installation and long-term support needs, is producing 10 times more jobs than traditional utilities.
- Upgrading coastal city infrastructure (Mozambique):
  - Cyclones Idai and Kenneth killed more than 600 people and affected almost 2 million in Mozambique.
  - Resilience measures in Beira port (upgraded primary drainage, contingency planning, solar-powered street lighting, emergency restoration of transport/logistics services) prevented further loss of life and allowed quick resumption of port operations.

### Macroeconomic Gains from Resilient Infrastructure (Model Simulations)
- Simulations based on Marto, Papageorgiou, and Klyuev (2018) and Buffie and others (2012):
  - Public investment scaled up by 1 percent of GDP annually in years 1–5 in either standard infrastructure or resilient infrastructure.
  - A natural disaster occurs in year 6 calibrated to yield a fall in output of 1 percent under the standard infrastructure scenario.
  - Key simulated outcomes:
    - Output decline from the disaster is considerably lower when the country invested in resilient infrastructure versus standard infrastructure.
    - Post-disaster consumption inequality widens less with resilient infrastructure; resilient infrastructure shelters poor households from consumption cuts.
    - Although resilient infrastructure requires faster public debt accumulation before a disaster (because it is more costly), rebuilding costs after a disaster are limited, reducing debt pressures relative to the scenario with standard infrastructure.
    - Grant financing (example in model: grants covering 80 percent of resilient infrastructure investment) would considerably reduce the impact on public debt.

*International Monetary Fund. Regional Economic Outlook: Sub-Saharan Africa, April 2020.*

### 2. ADAPTING TO CLIMATE CHANGE IN SUB-SAHARAN AFRICA

### 2. ADAPTING TO CLIMATE CHANGE IN SUB-SAHARAN AFRICA

### References
- Intergovernmental Panel on Climate Change (IPCC). 2018. “Summary for Policymakers.” In Global Warming of 1.5°C, edited by V. Masson-Delmotte, P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, and others. Geneva: World Meteorological Organization.
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*Source: ch2 - 2. ADAPTING TO CLIMATE CHANGE IN SUB-SAHARAN AFRICA*

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_Source: https://www.imf.org/-/media/files/publications/reo/afr/2020/april/english/ch2.pdf_