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JEREMY MAGGS: It’s evident that South Africa is increasingly experiencing the consequences of climate change, with extreme weather events like floods and droughts becoming more frequent and severe.

These events pose significant challenges not only for the environment but for the economy, impacting industries, infrastructure, and our everyday lives. I’d like to explore this issue further.

We have Dr. Nomhle Ngwenya with us, a board member of the National Advisory Council on Innovation and an expert in climate risk and ESG [Environmental, Social, and Governance].

Dr. Ngwenya, thank you for being here. You’ve highlighted the financial stresses arising from climate-related events. How do you assess South Africa’s current economic resilience in light of ongoing weather-related disruptions?

NOMHLE NGWENYA: Thank you for having me. This is a timely and crucial conversation, as climate change compounds existing economic issues.

For example, we already grapple with a persistent challenge of aging infrastructure and inadequate maintenance.

Climate change is making these issues worse: each time extreme weather events like floods occur, our infrastructure is compromised, particularly our stormwater drainage systems and the ongoing pothole crisis. As climate change trends continue to grow, the economic impacts will be significant.

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The crisis of natural disasters in KwaZulu-Natal

JEREMY MAGGS: I contend that climate risks are not adequately incorporated into macroeconomic planning and policymaking. There appears to be a gap between the environmental realities you’ve discussed and broader economic strategies.

NOMHLE NGWENYA: Absolutely. We see a considerable lack of institutional coordination during weather events, often over-relying on Cogta [Department of Cooperative Governance and Traditional Affairs].

However, climate change impacts various departments, such as Health and Transport.

At the governmental level, we lack integration, and extreme weather events are not included in national statistics or economic models, which is essential for comprehending their ramifications on our economy and GDP.

JEREMY MAGGS: Why do you think this integration is missing? Are we essentially turning a blind eye to the issue?

NOMHLE NGWENYA: There are several factors at play. One is insufficient collaboration between the private sector and government. The South African Reserve Bank and the Prudential Authority are beginning to partner with businesses to integrate climate-related risks into their financial plans.

There’s a real interest in how the private sector can adapt and mitigate the impacts of climate change, but collaboration remains inadequate, and both sectors hold valuable insights.

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Moreover, there is a skills gap. A decade or two ago, the integration of climate-related risks into financial understanding was a relatively new concept, creating a gap in knowledge that we need to bridge.

That’s why global initiatives like the Network for Greening the Financial System and other international organizations are crucial—they offer lessons from both developed and developing countries on adapting to and mitigating extreme weather events.

JEREMY MAGGS: Is there hesitance in the private sector to get more involved, or does the government adopt a “we can manage this” mindset?

NOMHLE NGWENYA: Multiple factors are at play. First, there’s a substantial reliance on private sector funding for initiatives like early warning monitoring systems.

We must also address fiscal policy and budgeting. For example, Cogta has earmarked over R600 million from R1 billion to respond to extreme weather events. We need to use contingency funds wisely.

We must assess what resources are available to both government and private sectors and how we can collaborate effectively.

Additionally, it’s vital that our policy framework is adjusted effectively. While we have commendable policies, implementation remains a challenge, highlighting the previously mentioned gaps in institutional collaboration.

JEREMY MAGGS: As a member of the National Advisory Council on Innovation, do you believe enough investment is being directed toward technological innovation to tackle the climate risks you’ve mentioned?

NOMHLE NGWENYA: Considering key policies like the Decadal Plan and initiatives championed by Minister Blade Nzimande, there’s growing momentum, especially regarding artificial intelligence and early warning systems.

Read: Cape Town invests millions to keep a digital eye on its sewer pump stations

There’s a heightened awareness and ongoing efforts to ensure that investments not only focus on early warning systems but also align with our broader scientific and decadal objectives.

JEREMY MAGGS: It’s crucial, I imagine, for local communities to be engaged and better prepared for resilience against climate-induced disasters. Yet, various competing priorities exist.

NOMHLE NGWENYA: Indeed. Numerous socio-economic challenges persist, including high unemployment, poverty, and health concerns. This is why indigenous knowledge is extremely valuable, as it empowers communities to participate in climate adaptation and mitigation efforts.

JEREMY MAGGS: In closing, considering our discussion, how much time do we have left?

NOMHLE NGWENYA: Very little. Extreme weather events are increasing in frequency and intensity, and we’re facing a volatile climate crisis. For instance, the Durban floods in April 2022 led to a 0.7% contraction in our GDP. Key sectors like agriculture rely on stable climate conditions.

As climate change becomes increasingly unpredictable, this will directly influence agricultural pricing.

Regarding time, we don’t have much left. However, there are significant opportunities for investment, partnerships, and collaboration to effectively adapt to and mitigate these extreme weather events.

JEREMY MAGGS: The warning is clear. Dr. Nomhle Ngwenya, thank you for your insights as a board member of the National Advisory Council on Innovation and an authority on climate risk and ESG.

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