By Faridat Salifu
The United Nations has cautioned that Africa is on track to encounter a substantial $2.5 trillion shortfall in climate finance by 2030.
This alarming revelation comes amidst mounting concerns over the continent’s disproportionately low contribution to global greenhouse gas emissions juxtaposed with its disproportionately severe climate impacts.
During a conference held in Victoria Falls, Zimbabwe, the United Nations Economic Commission for Africa’s chief economist, Hanan Morsy, emphasized the urgency of addressing Africa’s pressing financial needs to combat climate change.
Morsy highlighted the stark disparity, noting that while Africa currently garners a mere 2% of global investments in clean energy, it necessitates a staggering $2.8 trillion in investment within the sector by the end of the decade.
Morsy articulated the repercussions of inadequate funding, warning of a perilous cycle where investment shortfalls exacerbate exposure risks, amplify impacts, and consequently diminish fiscal capacity while elevating finance costs.
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Despite its minimal carbon footprint relative to other continents, Africa bears the brunt of climate change, enduring annual losses equivalent to 5% of its gross domestic product (GDP).
The crux of the issue lies not only in the insufficiency of climate finance but also in the burden of heavy public debt borne by African nations.
Morsy underscored that African countries incur interest rates on debt that are 1.7 percentage points higher than other nations, diverting crucial resources away from climate action to debt servicing.
Calls for reform resonated throughout the conference, with UNECA Executive Secretary Claver Gatete advocating for a fundamental overhaul of the global financial architecture.
Gatete cited alarming statistics, including estimates from the UN Development Program revealing that subjective credit ratings are exacting a substantial toll on Africa, depriving the continent of up to $74.5 billion in financial resources.
As Africa grapples with the daunting task of mitigating climate change impacts, the imperative for equitable and robust financial mechanisms to support the continent’s resilience has never been more urgent.
