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IMF Working PaperAfricanDepartmentStrategies for Africa’s Climate Resilience: Trade and PracticesPrepared bySamanthaBorkhoche,Eman Abdulla,Edward Gemayel,Vidhi Maheshwari,Faten SalibaAuthorized for distribution by Edward GemayelJuly 2025IMF Working Papersdescribe research in progress by the author(s) and are published to elicitcomments and to encourage debate.The views expressed in IMF Working Papers are those of theauthor(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.ABSTRACT:Africa faces growing environmental and developmental pressures that threaten food security,economicstability, and long-term growth. These challenges are compounded by rapid population growth andstructural vulnerabilities. This paper explores how shifts toward more sustainable production andpractices mayhelp mitigate adverse outcomes in the region. Using local projection methods, we findthat increasing the use ofgoods with lower environmental impact contributes to measurablemedium-term improvements. Specifically, weobserve reductions in ecological footprint by around 4%,in net emissions embedded in production by 60–100%of total domestic output, and in fine particulateair pollution by roughly 1%. We also introduce a novelSustainable Practices Index for Sub-SaharanAfrica to benchmark country-level performance and foster greaterregional alignment. Our findingssuggest that countries engaging more actively in such practices experienceimprovements inenvironmental outcomes of around 0.3–1.5% in the medium term.RECOMMENDED CITATION:Borkhoche, S.,Abdulla, E.,Gemayel, E.,Maheshwari, V., & Saliba, F.(2025).“Africa in Transition: Innovation, Adaptation, and Resilience Through Practices.” IMF Working Paper No.25/131(Washington, DC: International Monetary Fund).O13, O55, C32, O44Development strategy;production practices;regional cooperation;externalities;resource use;growth resilience;local projectionmethods;Sub-Saharan Africasab00014@mix.wvu.edu;Eman.Abdulla@warwick.ac.uk;EGemayel@imf.org,vmaheshwari@imf.org;fsaliba@imf.org JEL Classification Numbers:Author’s E-Mail Address: Keywords: Strategies for Africa’s ClimateResilience: Trade and PracticesPrepared bySamantha Borkhoche(Corresponding Author),Eman Abdulla,EdwardGemayel,VidhiMaheshwari, andFaten Saliba11We would like to thank the participants at the IMF seminar last Augustfor their valuable feedback, as well as various IMFdepartments for their helpful comments on an earlier draft of the paper. We would like to extend a special thank you for ZeinaHasna and Samuel Pienknagura for their valuable guidance. The views expressed in this paper are the sole responsibility of theauthors and should not be attributed to the International Monetary Fund, its Executive Board, or its management. All errors areour own. Contents1Introduction2Background2.1Trade and Economic Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2Trade and the Environment: Theoretical Background . . . . . . . . . . . . . . . . . . . . . . .2.3Trade and the Environment: Empirical Background. . . . . . . . . . . . . . . . . . . . . . .2.4Contribution to the Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Data and Methodology3.1Environmental Outcomes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.2Trade and sustainable Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.3Main Control Variables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.4Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.5Local Projections Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4Effect of sustainable Trade on Environment Outcomes5OECD Country Sample Comparison6Implications on Economic Welfare7Sustainable Practices Index7.1Data and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.2Effect of Sustainable Practices on Environmental Outcomes. . . . . . . . . . . . . . . . . . .8Conclusion and Policy Implications 3445677710121315161922252528292 1IntroductionAfrica is at the forefront of the climate crisis, bearing a disproportionate burden of its impact despite itsminimal contribution to global greenhouse gas emissions.The Global Center on Adaptation finds thatsurface temperatures are increasing across all African regions and the continent is warming faster than theglobal average over both land and the oceans (Global Center on Adaption, 2022). Per EM-DAT database,between 2011 and 2020, on average approximately 13 million people in Africa were impacted by droughtsand 3.5 million were impacted by floods (EM-DAT).The continent’s vulnerability to climate change is stark - manifesting in severe droughts, flooding, andshifting weather patterns - threatening food security and economic stability. Jaramillo et al (2023) furthernote that under