Stakeholders urged to collaborate in fight against climate change
Governments, Multilateral Development Banks (MDBs) and the private sector need to work together, for the continent to mobilise enough resources to drive its climate action agenda. This was one of the messages relayed during the Climate Change Global Business Summit, an event convened by The European House – Ambrosetti, to tackle the critical issue of insufficient climate finance hindering Africa's fight against climate change. Despite being the smallest contributor to global CO2 emissions, Africa bears a disproportionate burden from climate change impacts. The continent faces a significant funding gap, with current climate finance flows to Africa covering only 11 percent ($29.5 billion) of what is needed annually to implement climate action plans (NDCs). Private funding is further limited, concentrated in countries with developed financial markets and focused on energy sector mitigation projects. Adaptation efforts, crucial for Africa's resilience, are neglected due to perceived risks and uncertain returns. The European House – Ambrosetti noted that key obstacles to progress include financial constraints, weak governance structures, limited technical expertise, and unclear or inconsistent data. These challenges prevent Africa from translating policy commitments into concrete action. While African policy measures align with the Paris Agreement and the African Union's climate change strategy, inconsistent implementation due to financial gaps and lack of coordinated governance remains a hurdle. In East Africa, NDCs heavily rely on foreign support, with domestic resources covering only 18 per cent. Multilateral Development Banks and Development Finance Institutions (DFIs) have played a vital role in attracting foreign capital to Kenya, Ethiopia, and Tanzania. Kenya attracted 28 per cent of mapped capital flows for a total of $7 billion, with a focus on agriculture and urban development. The European House – Ambrosetti is calling on African governments to strengthen regulations and policies to attract climate investments while ensuring transparency and stability. Upcoming elections in 20 African countries present an opportunity to solidify democratic institutions and global governance for sustainable development. Additionally, utilizing innovative financial instruments like results-based financing, risk mitigation tools, and capital market instruments can address climate finance barriers and cater to investor needs. The Climate Change Global Business Summit emphasises the urgency of collective action for Africa's climate resilience. By implementing these recommendations and fostering collaboration, Africa can bridge the financial gap and accelerate its transition to a sustainable future.