The cost of living crisis has gripped the globe over the past three years, affecting both rich and poor countries. Many blame the COVID-19 pandemic and the economic shock of Russia’s invasion of Ukraine. In Africa, these events had an impact, but growing poverty was evident even before they occurred.
Across the continent, the cost of living crisis is hammering communities that are already struggling to get enough food, fuel, decent jobs and social support to survive. Those who were already poor have become poorer; those who were just above the poverty line have fallen below it. Since the pandemic, another 55 million Africans have been pushed into extreme poverty.
The main cause of this poverty is the chronic decline in the natural resources that sustain poor households. Degradation of soil, freshwater, forests and biodiversity directly affects the livelihoods of millions of poor people living in rural areas. That’s because these resources provide these communities with food, fuel, building materials, and jobs.
According to the Food and Agriculture Organization of the United Nations, around 90 percent of the extremely poor depend on forests for at least some of their livelihoods. Deforestation and other types of environmental degradation have continued unabated in recent years. Even during the pandemic, this trend has not changed.
However, the main response of African governments has been to continue to emphasize traditional economic growth. The problem with this approach is that it treats gross domestic product (GDP) as the only barometer of economic progress, without taking into account the wealth inherent in nature and ecosystems.
This short-sighted approach encourages policies and investments that disproportionately benefit the rich, leave the poor behind, and allow the abuse and depletion of the natural resources on which they depend.
Instead, African policymakers should focus on the natural environment that sustains the poor, without which they will not be able to survive rising living costs or any future crises.
Governments need to act to curb environmental degradation, which makes natural resources scarcer and less resilient. To do this, they need to change the way they measure progress and growth. They need to embrace the GDP of the poor: Naturally.
They need to be at the center of policymaking when it comes to big business such as agriculture, industry and finance. The revenue these businesses generate for the public budget cannot outweigh their negative impact on the environment and the economic damage they cause.
What’s more, taking action to protect the environment often costs less than supporting large polluting corporations to ensure their profitability.
Take agriculture, for example. Subsidies are currently distributed in a way that favors industrialized, chemical-dependent agriculture at the expense of small farmers and the environment, mainly benefiting large landowners and multinational corporations.
Of the $611 billion spent annually on agricultural subsidies, 86 percent, or $528 billion, could harm climate, biodiversity and human health. This amount exceeds the estimated US$ 30-350 billion needed annually to transition to sustainable, diverse and climate-resilient food systems.
Now is the time for governments, multilateral organizations and businesses to turn the rhetoric of “leaving no one behind” into reality by recognizing and protecting the GDP of the poor. It is time for us to reconnect sustainable development with human development.
To do this, three key steps need to be taken urgently. First, the government should transform its wealth accounting system by measuring the GDP of the poor. Rwanda started doing this in 2014, enabling more efficient land-use planning and preventing ecosystem fragmentation. Governments can also use the Ecosystem Accounting Framework adopted by the United Nations Statistical Commission in 2021 as a model.
Second, governments and development partners must help African farmers transition from extractive, high-carbon agriculture to regenerative agriculture that raises the poor’s GDP. One example they could follow is Germany’s plan to end subsidies for harmful agricultural practices and promote research and development of alternatives.
Third, development finance institutions and companies must adapt their investment strategies to protect and sustain natural assets. They should prioritize projects and initiatives that enable local communities to manage their environment and benefit from it.
To be sure, acknowledging the GDP of the poor is more than an accounting exercise; it is a necessary shift in our political economy. By acknowledging these assets, we can begin to loosen the grip of vested interests that benefit from the status quo, while improving the welfare of the majority and protecting the planet’s natural resources.
The cost of living crisis is a wake-up call to take a hard look at our priorities, our systems and our values. A call to recognition that in the pursuit of wealth we are neglecting the natural wealth that feeds billions of poor people.
It’s not just the numbers on the balance sheet that are at stake. At stake is our very existence as human beings.
The views expressed in this article are the author’s own and do not necessarily reflect the editorial position of Al Jazeera.