AfDB advocates private sector financing to address climate change in Africa

By Cynthia Ezekwe.

The African Development Bank (AfDB), has called on African policy makers to implement greater efforts in mobilising domestic resources and private sector financing to help African  countries achieve climate and green growth transitions.

Kevin Urama,chief economist and vice president for economic governance and knowledge management,AfDB, stated this  at the launch of the bank’s  2023 West Africa Economic Outlook report titled,  “Mobilising private sector financing for climate and green growth in West Africa,

According to Urama, Africa is being short-changed in climate financing and needs between $235 billion and $250 billion annually through 2030 to meet investments under its nationally determined contributions.

The AfDB chief economist noted further  that Africa received only about $29.5 billion in climate financing between 2019 and 2020, stating that private sector financing to support climate adaptation and mitigation in Africa is estimated at just $4.2 billion from 2019-2020, the lowest of any region of the world.

Quoting from the report, Urama said: “Africa can accelerate its green development transitions by optimising its natural capital, estimated at about $6.2 trillion in 2018, adding that the continent, however, was not getting the best out of its natural resources because of poor valuation, degradation, illicit capital flows and losses from royalties and taxes.

Also speaking at the report launch, Blaise Nkamleu, African Development Bank lead economist  said innovative instruments and mechanisms need to be deployed by West African governments to attract private sector financing and boost private sector financing for climate change and green growth,

The 2023 West Africa economic outlook report noted that adapting to climate change and the depletion of the region’s natural resources present an opening for businesses and governments to embrace sustainable and green growth.

The report pointed out that West Africa has enormous potential to achieve green growth, green industrialization being the most obvious pathway.

It also noted that the rationale for green growth across the region is quite comprehensive as climate change impacts and risks; prevents natural capital depletion, poverty, and food insecurity; and creates employment opportunities.