Africa a 'major part' in global green economy

The African continent requires bold interventions to break the barriers preventing countries from accessing the funds they need for climate action and a fair and just transition, experts said.

Speaking ahead of the COP29 United Nations Climate Change Conference, which will convene from Nov 11 to Nov 22 in Baku, Azerbaijan, experts argued that African countries must chart their unique paths toward achieving such change.

Nathalie Delapalme, CEO of the Mo Ibrahim Foundation, said that when addressing fair transition in the upcoming COP29 meeting, it is important for parties to recognize that this should refer to equitable and sustainable energy practices for both the developed and underdeveloped countries.

"Currently, over 600 million people in Africa do not have access to energy. This means that they do not have access to quality healthcare, education, business, jobs and many other services," Delapalme said during a webinar hosted by the Africa CEO Forum, a nongovernmental organization.

"Africa needs to be a major part of the conversation because it is impossible to build a green global economy without tapping into Africa's potential and without the continent's assets," she added.

Deo Onyango, a finance specialist with the International Finance Corporation, said that Africa is experiencing the worst economic blow from climate change globally with the African Development Bank estimating the continent loses 5 to 15 percent of its annual GDP to climate change.

Financing gap

According to him, attaining a just transition for Africa has been a challenge mainly due to the glaring financing gap in the face of rising transition costs. He added that in the upcoming COP29, more efforts should be made to augment public financing with private capital, stimulate domestic financing for climate action within players in Africa and focus on adaptation to build resilience.

Onyango said: "To promote green investment, Africa needs to develop a comprehensive green taxonomy policy which should be an instrument that provides clear, relevant and actionable guidance for the market. The framework should offer a clear classification of climate initiatives on the continent, define sustainability criteria, foster a common understanding, build trust, and unlock substantial green investments."

Financial institutions in Africa have also been called upon to play a more central role in driving Africa's transition to green energy.

Rachael Antwi, head of sustainability at Ecobank, a pan-African banking conglomerate, said that local financial institutions are faced with a high cost of funds which makes it hard for them to finance climate change actions as required.

"Local financial institutions should get the knowledge of how to come up with affordable climate action products to support businesses that are working to mitigate the effects of climate change. We have a lack of knowledge and capacity building and there is not much knowledge in the market on climate finance transactions to be able to develop more innovative products," Antwi said.

As the continent gears up for the upcoming summit, Antwi said Africa should explore more avenues for raising climate funds like carbon markets.

The continent should also fast-track its integration because creating a common market will make it easy to come up with common positions and policies, Delapalme said.