According to experts from the African Development Bank and International Monetary Fund (IMF), African nations must raise $1.6 trillion in the next seven years to fulfill their Nationally Determined Contributions (NDC) commitments to combat the effects of climate change.
The experts revealed this in a panel discussion on Monday at the IMF-hosted 2022 African Economic Outlook session for the African Development Bank in Washington.
“African countries need to mobilize $1.6 trillion between 2022 and 2030 to meet their Nationally Determined Contributions to fight climate change,” a statement by the AfDB on Wednesday quoted participants at the meeting to have said.
It stated that the continent has only received $18.3 billion annually up until this point, leaving a $108 billion funding imbalance.
“With current trends, Africa’s NDCs will not be achieved,” AfDB said.
The NDC is a document that embodies bold commitments and initiatives made by nations that have endorsed the Paris Agreement in an effort to cut carbon emissions effectively and efficiently and so lessen the catastrophic effects of climate change in their individual nations.
It also outlines the steps that nations plan to take to strengthen their ability to adapt to the effects of rising temperatures.
Acting Chief Economist and Vice President of AfDB Kevin Urama made a point during his presentation that while Africa has significant comparative advantages to lead the globe in the new green transition, it lacks the financial resources to do so.
According to him, the findings of the 2022 African Economic Outlook demonstrate how complex and wasteful the framework of climate funding is.
Mr. Urama claimed that as a result, the primary goal of climate finance—to support nations that are susceptible to climate change—is not being met.
“Climate change is a major, existential issue for Africa. The least vulnerable nations are those that are receiving climate financing, according to Mr. Urama.
Abebe Selassie, director of the IMF’s African Department, made the onerous point in his speech that African authorities must invest trillions of dollars in a crucial energy transition that the area needs to further its growth.
He said, “At the same time, they are being asked to think about the adverse effect that this may have on climate change, but advanced countries who benefited from climate unfriendly policies are unwilling to support development in the region.”
Mr. Selassie said “this is one issue that policymakers raise with us when we engage with them on the financing challenges they face”.
He described the findings of the 2022 African Economic Outlook as “sobering”, and that “it raised some profound issues.”
Similarly, IMF’s Assistant Director in the Fiscal Affairs Department and Climate Change Policy Coordinator, James Roaf, identified adaptation as the biggest issue for Africa.
He said, “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.”
“Mobilizing the private sector is critical, with policies such as carbon pricing to encourage investment in renewables, or improving adaptation incentives by reinforcing property rights or strengthening regional trade,” Mr Roaf said.