The African Development Bank (AfDB) and International Monetary Fund (IMF) experts say there is the need to urgently mobilise climate financing for Africa.
A statement by AfDB said the experts took the position during a panel discussion on the AfDB’s 2022 African Economic Outlook hosted by the IMF in Washington, DC.
Participants at the meeting heard that African countries needed to mobilise $1.6 trillion between 2022 and 2030 to meet their Nationally Determined Contributions (NDCs) to fight climate change.
“So far, they have only received $18.3 billion annually, leaving a financing gap of $108 billion dollars. With current trends, Africa’s NDCs will not be achieved.
“Africa has huge comparative advantages to lead the world in this new green transition, but it lacks the capital to do so,” AfDB Acting Chief Economist and Vice President, Kevin Urama, said in his presentation.
The panel comprised Prof Urama, IMF’s Assistant Director Fiscal Affairs Department and Climate Change Policy Coordinator, James Roaf, and Anthony Simpasa, Acting Manager of the AfDB Macroeconomic Policy, Debt Sustainability and Forecasting Division.
It was moderated by Cathy Pattillo, the Deputy Director of IMF’s African Department.
Urama emphasised that the findings of the 2022 African Economic Outlook showed that the structure of climate finance was very complicated and created a misallocation of resources.
“As a result, the main objective of climate finance to support climate-vulnerable countries is not being achieved.
“One fundamental, existential issue for Africa is climate change. The countries that are receiving climate financing are the less vulnerable ones,” Urama noted.
Urama further identified the need for a different approach to solving the climate challenge in Africa.
“What I see are opportunities to do things differently so that we are not using an old map to chart a new world.
“This will include tradeoffs.
“How do we work together as the global community to solve this global challenge for ourselves, our children, and future generations,” he said.
Abebe Selassie, Director, African Department, IMF, said that African policymakers face unenviable task of needing to invest trillions of dollars in important energy transition that the region needs to advance its development.
“At the same time, they are being asked to think about the adverse effect that this may have on climate change, but advanced countries which benefitted from climate unfriendly policies are unwilling to support development in the region.
“This is one issue that policymakers raise with us when we engage with them on the financing challenges they face.”
Selassie described the findings of the 2022 African Economic Outlook as “sobering”, observing that it raised some profound issues.
IMF’s Assistant Director, Fiscal Affairs Department and Climate Change Policy Coordinator, James Roaf, identified adaptation as the biggest issue for Africa.
Roaf said, “The African Economic Outlook rightly stresses the need to integrate climate objectives in overall sustainable development pathways.
“We need to focus on making the most of the opportunities that the clean energy transition offers so that climate mitigation and adaptation policies come hand in hand with rising prosperity.”
He further drew attention to what countries could do themselves to maximise climate finance and make the best use of it.
“Mobilising the private sector is critical, with policies such as carbon pricing to encourage investment in renewables or improving adaptation incentives by reinforcing property rights or strengthening regional trade,” Road said.
The theme of the 2022 African Economic Outlook, “Supporting Climate Resilience and a Just Energy Transition in Africa”, highlights climate change as a growing threat to lives and livelihoods in Africa.
By Ikenna Uwadileke
