Mr Ken Ofori-Atta, Chairperson of the Board of Governors of the African Development Bank (AfDB), says Africa needs about $3 trillion to enable it reduce climate change vulnerabilities.
Climate change vulnerabilities is the degree to which humans, natural organisms and the physical environment is susceptible to, and unable to cope with the adverse effects of climate change.
The vulnerabilities include more frequent and intense drought, storms, heat waves, rising sea levels, melting glaciers and warming oceans, which directly harm animals, destroy the places they live, and wreak havoc on people’s livelihoods and communities.
Mr Ofori-Atta, said: “Africa now needs close to $3 trillion in additional resources to finance the implementation of nationally determined contributions (NDCs) and reduce climate vulnerabilities.”
He said this at the opening of the 2022 annual meetings of the Board of Governors of AfDB in Accra on Tuesday.
The week-long event is being held on the theme: “Achieving Climate Resilience and a Just Energy Transition for Africa,” and would also feature discussions on addressing the continent’s energy transition challenges.
Mr Ofori-Atta, who is also Ghana’s Finance Minister, indicated that the continent needed roughly $66 billion to meet its health financing needs, and $39 billion to improve access to education.
He said this in recognition of the development and financing gap, which the United Nations Economic Commission for Africa (UNECA), pegs at $1.7 trillion.
The continent’s infrastructure financing gap has also widened to approximately $130 billion–$170 billion annually until 2025.
Mr Ofori-Atta, said, “Given the current local and global dynamics, it has become imperative that we vigorously mobilise resources through innovative means, including from the digital space.”
“As worldwide momentum around climate action accelerates, we need our development institutions to guide a pragmatic transition for Africa that balances our developmental aspirations with realistic net-zero targets,” he added.
Africa is responsible for under four percent of global emissions, but are disproportionately affected by climate change and the actual opportunity cost of meeting COP26 targets.
He said despite the vast opportunities for green investments, Africa attracted less than one percent of global green bond issuances, estimated at $600 billion.
He said only 21 African countries have access to the external capital markets, which is costly, with African countries paying higher interest rates than their peers with similar or worse economic fundamentals.
“Estimates of what may be termed the ‘African premium’ range from 100 to 260 basis points even after accounting for economic fundamentals,” the Chairperson of AfDB Board of Governors, said.
He then urged AfDB to remain committed to providing competitive financing for its members to close the widening development and financing gap.
He said: “Positioning our Bank to crowd in the needed finance for climate must continue to engage our attention, mainly because the prospects of being left with ‘stranded assets’ is an emerging concern in the African climate change debate.”