$3 Trillion Needed to Address Africa’s Climate Finance Shortfall

Africa faces a monumental financial challenge in its efforts to combat climate change, with a staggering $3 trillion required to bridge the yawning gap in climate finance, as revealed by the United Nations Economic Commission for Africa (ECA).

During the recent 11th Conference on Climate Change and African Development (CCDA11) in Nairobi, Kenya, a session dedicated to climate finance shed light on this substantial financial need. 

The session, moderated by Harsen Nyambe of the African Union Commission, underscored the pressing nature of this issue.

ECA pointed out that climate-related disasters already have a heavy toll on African economies, costing between five and 15 per cent of GDP annually. 

To effectively implement Africa’s Nationally Determined Contributions (NDCs) in the fight against climate change, nearly $3 trillion is required, with approximately $2.5 trillion needed between 2020 and 2030.

The challenge ahead is significant, but Africa possesses the potential and resources to address it. With the collaboration of developed nations and private sector involvement, the continent must take ownership of its energy transition. Africa boasts abundant renewable energy resources, the potential for green hydrogen production, essential minerals for renewable energy technologies, and natural capital suitable for carbon sequestration.

Efforts to support Africa’s green transition

Jean-Paul Adam, from the Office of the Special Advisor on Africa (OSSA), highlighted ECA’s concerted efforts to support Africa’s green transition. 

Initiatives such as the Sustainable Debt Coalition (SDC) and emerging debt-for-nature swaps are being leveraged to bridge the financial gap. Africa’s rich marine ecosystem is also under consideration, with projects like the Great Blue Wall, which emphasizes sustainability and job creation.

Also, Stephen Funso of the African Development Bank (AfDB) emphasized the importance of adaptation in Africa’s climate response strategy. 

AfDB’s approach centres on increasing resources for priority sectors, with an unwavering commitment to mobilizing resources within each country. Funso asserted that finance, resilience, and innovative solutions are essential priorities to engage the private sector in this crucial endeavour.

Africa’s journey towards climate resilience and sustainability is undoubtedly arduous, but with a determined effort, collaboration, and innovative financing, the continent is poised to address its climate finance gap and secure a sustainable future