COVID-19 Fiscal Policy Response and Climate Change Action in Africa

The report evaluates the fiscal responses of six African nations to the COVID-19 pandemic through a climate lens, categorising policies as green, red (unfriendly), or grey (neutral). It finds that most stimulus packages were climate neutral, with Nigeria being the only country to implement an overall green package. In contrast, Uganda's response was deemed 'red' due to investments in carbon-intensive industrial parks, and South Africa's package was neutral despite its high emissions profile. The author argues that green spending is more effective for job creation than fossil fuel investments and recommends that African governments utilise Pigouvian taxes and green financing to achieve a sustainable economic recovery.

• Nigeria was the only country among the six studied to implement an overall green stimulus package, incorporating both clean energy spending and revenue measures that disincentivise non-clean energy.
• Nigeria's green recovery efforts included the $0.62 billion Solar Power Strategy and the $0.23 billion National Gas Expansion Programme, alongside the removal of $4.42 billion in fossil fuel subsidies and a 50% increase in electricity tariffs.
• Uganda's fiscal response is classified as 'red' or climate unfriendly because it allocated $89.7 million to accelerate the Kampala Industrial and Business Park Infrastructure Scheme, which is projected to increase the country's annual emissions by approximately 58%.
• South Africa's stimulus package was climate neutral (grey) because a $0.12 billion investment in environment, forestry, and fisheries jobs was offset by a $0.12 billion carbon tax deferral.
• Senegal, Benin, and Tanzania adopted stimulus packages that were entirely climate neutral, focusing on support for vulnerable households and businesses without including environmental initiatives.
• Analysis of the 2008 global financial crisis indicates that green spending is more effective at stimulating growth and employment than fossil fuel spending, creating at least seven full-time jobs per million dollars compared to fewer than three for fossil fuels.
• The report identifies three primary opportunities for African countries to achieve a greener recovery: expanding clean energy projects via green financing, implementing Pigouvian (carbon) taxes for fiscal consolidation, and establishing regulatory frameworks for green financial products.

APA

Matola, J. U. (n.d.). COVID-19 Fiscal Policy Response and Climate Change Action in Africa. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2021/11/CoMPRA-09-matola.pdf

Chicago

Matola, Joseph Upile. COVID-19 Fiscal Policy Response and Climate Change Action in Africa. South African Institute of International Affairs, n.d. https://saiia.org.za/wp-content/uploads/2021/11/CoMPRA-09-matola.pdf.

Wikipedia

{{cite report |last1=Matola |first1=Joseph Upile |title=COVID-19 Fiscal Policy Response and Climate Change Action in Africa |publisher=South African Institute of International Affairs |url=https://saiia.org.za/wp-content/uploads/2021/11/CoMPRA-09-matola.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{matolandcovid19, author = {Matola, Joseph Upile}, title = {{COVID-19 Fiscal Policy Response and Climate Change Action in Africa}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2021/11/CoMPRA-09-matola.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }