The African Development Bank has underscored the urgent need for increased private sector involvement in climate finance at a key meeting of African finance ministers.
Speaking at the "Sustainable Horizons: Climate Action Strategies for Ministries of Finance in Sub-Saharan Africa" conference in Kampala organised by Coalition of Finance Ministers for Climate Action (CFMCA), Prof. Anthony Nyong, the Bank's Director for Climate Change and Green Growth Department, stressed that the private sector financed less than 3 percent of adaptation activities in Africa between 2019 and 2022.
"We need to mobilise $213.4 billion annually from the private sector to close Africa's climate financing gap by 2030," Prof. Nyong stated. He identified perceived high investment risks and poor credit ratings as significant barriers to private sector participation.
Nyong joined a panel titled Unique Opportunities and Challenges for African Ministers of Finance, moderated by Uganda's Minister of State Planning Amos Lugoloobi. Mr. Bock Kalokh, Minister of Finance, Sierra Leone; and Mr. Joseph Ng'ang'a, CEO of the Africa Climate Summit and interim CEO at the Global Energy Alliance for People and Planet.
Minister Kalokh emphasised the urgent need for increased financial resources to implement mitigation and adaptation strategies by 2030. He stressed the importance of strategic investments for resilient economies, noting that a quarter of greenhouse gas emissions stem from the agriculture sector.
"Do we need further evidence before action? Do we wait to be on life support before we act? It is time to act, and we need to act now," Kalokh stressed. He called upon ministries of finance to prioritise funding for climate action and disaster mitigation, citing the escalating climate crisis and unclear climate finance architecture as significant challenges.
Mr. Ng'ang'a spoke about Africa's pivotal role in the global climate narrative, emphasising the continent's potential to offer solutions rather than just being a victim of climate change. "We have resources; if we accessed global financing, we could deliver solutions on climate," he stated. He urged the audience to view climate action as an opportunity to drive economic development, create jobs, and mitigate climate impacts within Africa.
In response to these challenges, Prof. Nyong highlighted the African Development Bank's initiative, the African Financial Alliance on Climate Change (AFAC), which aims to accelerate capital allocation for Africa's climate resilience.
The event concluded with a collective emphasis on the need for immediate and strategic action to address climate change in Sub-Saharan Africa. The insights provided a clear call to action for ministries of finance to prioritise and fund climate resilience initiatives, with the Bank Group positioning itself as a key facilitator in mobilising necessary resources and engaging the private sector.
The convening was supported by Enabel, NDC Partnership, UNEP, UNDP, Coalition for Capacity on Climate Action (C3A) and the World Bank
