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For Africa to tackle challenges posed by climate change, it has been projected that the continent would need an estimated $2.8 trillion between 2020 and 2030.
Harrison Rehoboth Consulting handed down this in its new policy analysis on what it would take to effectively meet the Paris Agreement.
According to the analysis, Africa needs about $277 billion annually to implement climate adaptation and mitigation projects, which are aimed at reducing the devastating impact of floods, droughts, desertification, and other environmental challenges threatening livelihoods across Africa caused by climate change.
Spokesperson to the consulting firm, Femi Sekoni, disclosed that such a huge fund is required with a view to helping African nations strengthen their infrastructure, protect vulnerable communities, improve food security, expand renewable energy, and transition to cleaner and more sustainable economies.
He noted that Africa relies on foreign support for financing despite the rising climate crisis, noting that domestic investors only contribute a small fraction towards financing the fight against climate challenges.
The analysis revealed that local institutions, including banks, pension funds, insurance firms, and private investors, contribute only about 10 per cent of climate finance flowing into Africa, while international organisations and development partners are responsible for the larger chunk.
Further revelations in the report stated that climate financing is unevenly distributed across African nations, stating that countries such as South Africa, Egypt, Nigeria, Morocco, and Kenya are attracting a significant percentage of available funding due to their stronger financial systems and investment structures.
Many African countries are noted to be facing severe climate threats, yet are unable to attract large-scale funding as a result of weak institutions, limited project preparation capacity, policy uncertainties, and concerns over investment risks.
Concerns are raised about the financing available to African countries, warning that a large portion of the funds comes in the form of loans rather than grants or concessional financing.
The report noted that this type of financing could aggravate the debt burden of several African nations, which are already struggling with rising debt-servicing obligations and economic pressures.
It stated that repayment of such loans is difficult because climate adaptation projects such as flood control systems, drought resilience programmes, and coastal protection infrastructure often provide social and environmental benefits and generate little direct revenue.
The report noted there is a need for wealthier nations to provide more grant-based support to vulnerable countries to face the harsh effects of climate change.
Efforts of institutions such as the African Development Bank and some African countries, including Rwanda, Kenya, Senegal, Egypt, and South Africa, to expand climate investment initiatives and develop financing frameworks capable of attracting private investors were acknowledged.
Nevertheless, the report emphasised the need for stronger domestic financial systems, improved governance, better project planning, and reforms in global financial institutions to make climate funding more accessible across African countries.
It further advocates an increase in concessional financing, improved collaboration between governments and private investors, and stronger policies to encourage long-term investment in climate and infrastructure projects across Africa.
