#AfDBAM2024: Africa seeks US$277 Billion financing for Climate change mitigation

By Victor MUJIDU

Africa will require Ksh36.4 trillion ($277 billion) annually for an actionable step toward climate change mitigation, said Akinwumi Adesina, the President of the African Development Bank Group, during the opening ceremony of the 59th Annual Meetings of the AfDB.

However, despite the push towards the actualization of these funds, Africa’s climate financial needs remain acutely underserved, and yet, the impacts of climate change continue to pose an unprecedented threat to the continent.

“While Africa’s planning finance needs are in the order of Ksh36.4 trillion ($277 billion) annually, the global financial architecture delivers only 3.9 trillion ($30 billion) for Africa, a continent that contributes the least to climate change, and we suffer disproportionately from his negative effects, as we have seen in several countries cycle, said President Akinwumi Adesina.

As opposed to the promises and the wide range of opportunities offered to Africa, a huge gap still exists between what’s been promised and the reality on the ground. For instance, during the 28th edition of the United Nations Conference of Parties (COP28), climate change negotiators agreed to allocate over Ksh91.6 billion ($700 million) towards the loss and damage fund to support climate mitigation and recovery.

The United Arab Emirates committed $100 million to the fund, and Germany contributed Ksh13 billion ($100 million). The United Kingdom committed Ksh5.6 billion (40 million euros) and Japan committed Ksh1.3 billion ($10 million), while the United States committed Ksh2.3 billion ($17.5 million). However, the developed nations in question have barely honored those pledges.

As a result of the financial gaps caused by inappropriate funding, securing adequate climate finance has remained a significant hurdle for many African countries, impeding their efforts to address and adapt to the impacts of climate change.

For example, many countries on the continent face budget constraints and competing priorities, which restrict their ability to allocate sufficient funds to climate-related projects. Consequently, there is a critical gap between the funds needed to implement adaptation and mitigation measures effectively and the resources actually available.

The lack of mechanisms such as insurance and credit facilities not only inhibits the mobilization of funds for climate projects but also heightens the perceived risk associated with investing in the region. This high-risk perception, driven by factors such as political instability, regulatory uncertainties, and climate vulnerability, deters private investors from supporting climate initiatives in Africa.

Based on the idiom ‘Only the Wearer Knows Where the Shoe Pinches’, Africa now wants to act on the complicity of the climate change threats that have continued to wreak havoc in many African countries.

By addressing the systemic barriers to accessing finance, enhancing institutional capacity, and promoting innovative financial mechanisms, the hope is to accelerate progress towards climate-resilient and sustainable development on the continent.

According to Adesina, the ongoing devastating drought in several parts of Africa underscores the need for all stakeholders to come together to accelerate support and financing for Africa.

“Africa is in the eye of the storm from climate change, accounting for 9 out of the 10 most vulnerable countries to climate change globally,” Adesina told participants, adding that “the African Development Bank set a target to devote 40 per cent of its total financing to climate finance, and we have exceeded this target consistently in the past three years, consecutively, and stood at 55 per cent in 2023.”

As an ideal for leveraging climate finance, the African Adaptation Acceleration Programme—the flagship program of the African Development Bank and the Global Center on Adaptation—is mobilizing Ksh3.3 trillion ($25 billion) for climate adaptation, which will stand as the largest climate adaptation program in the world.

AfDB stands as a beacon of hope in building a new Africa, especially in terms of economic growth and expansion.

“We are enhancing our support and our shareholding in the Africa Development Bank, and we must support this institution, the African Development Bank, Trade Development Bank, and all the other financial institutions; we must give them the stamp of approval as leaders in this country and support that they can support us; we must believe in ourselves, you know, when you handed over the part of this report to me that this job is not released, said Saara Kuugongelwa-Amadhila, the Namibian Prime Minister.

The CEO of the Global Center on Adaptation (GCA), Professor Patrick V. Verkooijen, underlined the urgency of global adaptation financing as well as country investment plans for adaptation.

Verkooijen said, “Let us put this into context. Developing countries need Ksh429 trillion ($3.3 trillion) in adaptation finance over the next decade to 2035. Adaptation finance must quadruple, not by 2035. Today. And if we look at Africa, the situation is even more dire. Our key message is simple: Everybody must invest more in climate adaptation globally and in Africa.”

He highlighted how the Africa Adaptation Acceleration Program model with the African Development Bank and African Union was delivering good results: “the Africa Adaptation Acceleration Program must grow exponentially. It needs to be turbocharged.”