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[Contribution] Empowering Africa’s green future by bridging climate finance gap

June 3, 2024 - 15:04 By Korea Herald
Malle Fofana, Africa Regional Director, Global Green Growth Institute (GGGI).

Africa’s abundant natural resources, rich biodiversity, huge potential for renewable energy and active workforce make the continent a vital player in the global transition to green economy. Today, Africa stands ready to propel itself into a green revolution, capitalizing on its many opportunities and resources, and driven by unwavering determination to steer the continent towards a sustainable, resilient future. This commitment is exemplified through innovation, collaboration, and by forging partnerships with key players, partners, and stakeholders, both in Africa and beyond.

While climate change is the greatest challenge of our generation, Africa is ready to face it head-on, striving to implement innovative measures to yield long-term sustainable change. Africa is a continent of immense diversity and vibrancy, home to over 1.3 billion people across 55 countries, who speak thousands of languages contributing to a rich cultural heritage, dynamic economies, and a spirit of resilience and innovation that drives continuous progress and development. In addition, Africa’s youth population is growing rapidly and is expected to reach 850 million youth by 2050, and by 2063, young people will constitute half of the 2 billion working-age population.

But amidst the increasing and devastating impacts of climate change, Africa continues to pay a heavy price. Seven out of the world’s ten most vulnerable countries to climate are in Africa even though the continent only accounts for less than 4 percent of global carbon emissions – an indication of how vulnerable the continent is. Yet, in its pursuit of a sustainable, inclusive and resilient future, Africa faces one huge challenge: access to adequate green and climate finance.

Despite many financial commitments and pledges, and existing climate financing mechanisms, Africa’s climate agenda and actions remain mostly unfunded ambitions. It is heartbreaking to realize that even today, Africa receives less than 12 percent of the over $250 billion it needs each year to finance its climate actions and adapt to the devastating impacts of climate change. As a result, Africa struggles to finance its long-term plans, often implementing initiatives focused on quick wins to demonstrate the achievement of immediate objectives.

In order to support the member states, GGGI introduces the groundbreaking “Africa and Middle East SAFE Initiative.” This landmark initiative endeavors to "Scale-up Agriculture and Food systems for Economic" development in Africa and the Middle East and aims to benefit millions of people whose livelihoods are threatened by the climate crisis. The Africa and Middle East SAFE Initiative, a groundbreaking $10 billion public-private partnership, represents collaborative efforts to tackle the urgent issues of food security, climate change and rural livelihood vulnerability. Emphasizing the centrality of food security in COP28 discussions, the initiative demonstrates a dedicated commitment to advancing sustainable development and resilience in Africa and the Middle East through comprehensive and holistic strategies.

Agriculture, which remains the leading source of income and employment for more than two-thirds of the continent’s population, is the sector most heavily impacted by climate change. This industry accounts for approximately 30 to 40 percent of the continent’s gross domestic product. The increased erratic weather patterns, including extreme heatwaves and heavy precipitation, are causing major crop and livestock loss, and negatively affecting yields – further exacerbating food insecurity on the continent.

From droughts to floods to cyclones, Africa is experiencing some of the most devastating weather events in recent history. It is estimated that since 1971, Africa’s agricultural productivity has dropped by 34 percent due to climate change. Yet, fifty years onwards, African farmers still lack the tools and means to adapt to the fluctuating agricultural environment. Many businesses operating in the agricultural sector are micro, small, and medium enterprises (MSMEs), that lack ample resources to innovate and adequately adapt to today’s climate reality. Coupled with the enlarging climate adaptation and development needs, is the debt burden of the continent’s public sector. According to the International Monetary Fund, in 2023, public debt in sub-Saharan Africa amounted to over 44 percent of the continent’s GDP. These compounding effects illustrate the pervasive threat of climate change; it is disruptive to all aspects of life, harming the environment, economies and social structures.

Pivoting the discourse and action on climate issues will require African and international leaders to adopt a multifaceted approach that incorporates innovative financial tools, expands the role of the private sector, promotes cutting-edge technologies and encourages the larger carbon emission contributors to devote significant financial resources towards combating climate change. The inaugural 2024 Korea-Africa summit is one such avenue that provides a platform to amplify collaboration and champion unity through a shared vision: to amplify Africa’s climate aspirations and introduce critical financing channels and investments to drive sustainable economic growth.

A step in the right direction entails global collective action, strong international climate finance mechanisms and a robust enabling environment to attract investment and bolster transparency and governance. Central to this redefined approach to climate action is the nurturing of local expertise to develop innovative solutions tailored to the specific needs and context of the African socio-economic ecosystems. In parallel, capitalizing on the use of Domestic Resource Mobilization can attract international climate financing, showcasing countries’ commitment to climate action.

While climate change poses a risk to our economies, it also presents an opportunity for boldness and innovative financing structures, such as the issuance of green bonds, green loans, climate-focused private investments, carbon markets and debt-for-climate swaps, to convert climate ambitions and plans into reality.

By overcoming the challenges of climate change and climate finance, and seizing the opportunities that lie before us, we can build a greener, more prosperous and resilient Africa for present and future generations. We must all rise, united in purpose and resolve, with the support of the international community, to forge a sustainable future for all.

Malle Fofana is Africa regional director at Global Green Growth Institute. Views expressed in this article are his own. -- Ed.