In the past three years, a cost-of-living crisis has spread around the world, affecting both rich and poor countries. Many blame the economic shocks of the COVID-19 pandemic and the Russian invasion of Ukraine. In Africa, these events have had repercussions, but the increasing impoverishment was already visible before they happened.
Across the continent, the cost-of-living crisis has hit hard-pressed communities that were already struggling to access enough food, fuel, decent work and social support to survive. The already poor have become even poorer; those living just above the poverty line sink below it. An additional 55 million Africans have fallen into extreme poverty since the pandemic.
Much of this impoverishment is caused by the long-term decline of the natural resources that support poor households. The degradation of soils, fresh water, forests and biodiversity has a direct impact on the livelihoods of millions of poor people living in rural areas. This is because these resources provide these communities with food, fuel, building materials and employment.
According to the Food and Agriculture Organization of the United Nations, about 90 percent of people living in extreme poverty depend on forests for at least part of their livelihoods. And in recent years, deforestation – as well as other forms of environmental degradation – has only accelerated. This trend did not change even during the pandemic.
Yet the primary response of governments in Africa has been a continued emphasis on conventional economic growth. The problem with this approach is that it fixes on gross domestic product (GDP) as the only barometer of economic progress, which does not take into account the wealth of nature and ecosystems.
This myopic focus encourages policies and investments that disproportionately favor the rich while leaving the poor behind and enabling the abuse and depletion of natural resources on which they depend.
Instead, African policymakers should focus on the natural environment that sustains the poor, without which they cannot survive the rising cost of living – or any future crises.
Governments must take action to combat environmental degradation, which is making natural resources more scarce and less resilient. And to do that, they need to change the way they measure progress and growth. They must embrace the GDP of the poor: nature.
They need to put it at the center of their policy making when it comes to big business, including agriculture, industry and finance. The revenues these companies generate for government budgets cannot outweigh the negative impacts they have on the environment and the economic losses they cause.
In addition, taking action to protect the environment often costs less than supporting big polluting companies to ensure they are profitable.
Take agriculture as an example. The way subsidies are currently paid favors industrialized, chemical-dependent agriculture, which mainly benefits large landowners and multinational companies at the expense of smallholders and the environment.
A whopping $611 billion is spent annually on agricultural subsidies, of which 86 percent ($528 billion) is potentially harmful to the climate, biodiversity and human health. This amount exceeds the estimated $300-350 billion needed each year to transition to sustainable, diverse and climate-resilient food systems.
It is high time that governments, multilateral organizations and businesses turned the “leave no one behind” rhetoric into reality by recognizing and protecting the GDP of the poor. It is time we realign sustainable development with human development.
To do that, there are three key steps that need to be taken urgently. First, governments should transform their wealth accounting systems by measuring the GDP of the poor. Rwanda already started doing this in 2014, enabling more effective spatial planning and preventing fragmentation of ecosystems. Governments can also use as a model the Ecosystem Accounting framework, which was adopted by the United Nations Statistical Commission in 2021.
Second, governments and development partners must help African farmers transition from extractive, high-carbon agriculture to regenerative practices that boost the GDP of the poor. An example they can follow is Germany’s plan to end subsidies for harmful agricultural practices and promote research and development of alternative methods.
Third, development finance institutions and companies need to adjust their investment strategies to protect and conserve natural resources. They must prioritize projects and initiatives that empower local communities to manage and benefit from their environment.
Certainly, recognizing the GDP of the poor is not just an accounting act; it is a necessary shift in our political economy. By recognizing these assets, we can begin to release the grip of entrenched interests by taking advantage of the status quo, while improving the well-being of the majority and protecting the Earth’s natural resources.
The cost of living crisis is a wake-up call to rethink our priorities, our systems and our values. A call to realize that in our pursuit of wealth we have overlooked the richness of nature that sustains billions of poor people.
It’s about more than just numbers on a balance sheet. What is at stake is our survival as a human race.
The views expressed in this article are those of the author and do not necessarily reflect the editorial view of Al Jazeera.