African countries need $1.6 trillion to fund climate change financing gap
By Nneka Nwogwugwu
The African Development Bank Acting chief economist, Kevin Urama has called for funding of $1.6 trillion to bridge the climate financing gap in Africa.
Urama, along with representatives of IMF made this call at a panel discussion on the 2022 African Economic Outlook in Washington, DC.
Urama said African countries need to mobilise $1.6 trillion between 2022 and 2030 to meet their nationally determined contributions to fight climate change.
He said only $18.3 billion is received annually, leaving a financing gap of $108 billion.
Urama added that Africa has huge comparative advantages to lead the world in this new green transition but lacks the capital to do so.
According to him, the findings of the 2022 African Economic Outlook show that the structure of climate finance is complicated and creates a misallocation of resources and as a result, the main objective of climate finance — to support climate-vulnerable countries — is not being achieved.
He called for a different approach in 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,” he said.
Also, Abebe Selassie, director of the African department at IMF, said African policymakers face the unenviable task of needing to invest trillions of dollars in an important energy transition that the region needs to advance its development.
Selassie described the findings as “sobering and raised some profound issues”.
Also speaking, Roaf said adaptation was the biggest issue for Africa, as he suggested ways countries can maximise climate finance and make the best use of it.
“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,” Roaf said.
Members of the panellists include Kevin Urama, who is also AfDB’s vice-president for economic governance and knowledge management; James Roaf, IMF’s assistant director, fiscal affairs department and climate change policy coordinator and Anthony Simpasa, acting manager, AfDB’s macroeconomic policy, debt sustainability and forecasting division.