The State of Climate Finance in Africa: Climate Finance Needs of African Countries

CPI (2022) The State of Climate Finance in Africa: Climate Finance Needs of African Countries. # 45p

CPI is an analysis and advisory organization with deep expertise in finance and policy. It'smission is to help governments, businesses, and financial institutions drive economic growth while addressing climate change.

A group of sceintists have projected the total cost of implementing nationally determined contributions (NDC) for climate action in African countries to be $2.8 trillion for 2020-2030.

The countries are relying on external financial support for around $2.5 trillion of the cost, the analysis by Climate Policy Initiative, an advisory organisation, showed. 

Governments of African nations have committed $264 billion in domestic public resources — about 10 per cent of the total cost. 

Africa needs about $250 billion per year to meet the 2030 climate goals. Total annual climate finance flows in Africa for 2020 — domestic and international — were only $30 billion, the report added. 

Mitigation accounts for the largest share (66 per cent) of reported climate finance need in four out of the five African sub-regions. Individually, it accounts for 77 per cent of the total need in western Africa, 75 per cent in southern Africa, 70 per cent in central Africa and 57 per cent in eastern Africa. 

The transport sector was projected to require the largest share (41 per cent, $657 billion) of climate finance. Agriculture, forestry and other land-use sector, which is the biggest emitter of greenhouse gases, only accounts for 7 per cent of total needs ($108 billion).

South Africa, Ethiopia, Nigeria and Egypt have the highest need for yearly finance, together representing almost $151 billion per year, they added. 

The total cost projection includes loss and damage estimation provided by 51 out of 53 African countries, the authors noted. 

The climate finance figures are probably underestimations due to a lack of capacity and data from sub-national governments and vulnerable communities, the researchers said in the report.

The gap in climate finance data is making implementation of climate goals increasingly difficult in South Africa, according to a report published by GreenCape, South Africa-based green energy advocacy, and the Bertha Centre for Social Innovation and Entrepreneurship, an educational institution part of University of Cape Town, in partnership with CPI. 

Adaptation to climate change in Africa accounted for only 24 per cent of total climate finance needs identified, despite the continent being highly vulnerable to climate change.