Next month, African countries will convene in Addis Ababa, Ethiopia, for the second Africa Climate Summit (ACS2.0), a month after the environmental ministerial conference (AMCEN20) in Nairobi, Kenya and ahead of COP30 in November.
The first ACS, hosted by Kenya in 2023 and anchored on “Driving Green Growth and Climate Finance Solutions for Africa and the World,” called for a system that facilitates climate action financing to developing countries.
In his keynote address, United Nations Secretary-General António Guterres voiced support for Africa’s climate agenda, acknowledging the continent’s disproportionate burden in the crisis while underscoring its vast potential to lead in solutions.
Now, in Addis Ababa, African leaders will gather to turn that conviction into action. A decisive test, some experts say. Ethiopia’s State Minister, Ministry of Planning and Development (MoPD), Mr Seyoum Mekonnen told journalists in July that the three-day conference, slated for September 8-10, will be a summit “where Africa is no longer seen as waiting to be saved—but as leading the way forward.”
Rethinking aid dependency
The three-day convention will focus on three major engagement points, namely climate adaptation and resilience, nature and technology-based solutions, climate adaptation and resilience, and climate finance and Africa-led solutions. As foreign aid support dwindles, and support is increasingly issued more in loans than grants, the continent continues to battle climatic shocks, further burdening its economies and raising the risk for debt distress.
With studies showing the share of loans in climate support towards Africa to be more than double that of other regions in the Global South, African nations have sustained criticism of the international financial architecture, calling for a more just system. But even as these discourses unfold, Africa is also reinventing itself from a historically passive position of inaction to taking an active role in shaping its climate solutions on its terms and soil.
Africa-led climate financing accounts for 10 per cent of its total climate financing. Recognising the huge gap (99 per cent) in uninsured smallholder agricultural activities despite supplying about 70 per cent of the continent’s meals, the African Development Bank unveiled the Africa Climate Risk Insurance (ACRIFA) to offer insurance solutions to more than 40 million small-scale farmers in Africa. Dr Akinwumi Adesina, AfDB’s outgoing president, said during the launch at the sidelines of COP28 in Dubai that,” it will mobilise USD 1 billion of concessionary finance, high-risk capital and grants to de-risk private sector investments across agricultural value chains.” Further, support the African insurance industry to unlock financing for investments in climate-smart and green technologies.
Funding to face extreme weather events
The African Union, through its African Risk Capacity (ARC), offers coverage to the tune of USD 30 million per country per season, targeting drought events. The member states also receive payouts in the event of rainfall shortfall, with the support determined by ARC’s tool, the Africa RiskView, if the anticipated interventions cost surpass a certain threshold. Having received its seed funding from the Foreign, Commonwealth and Development Office (FCDO) and Germany’s KfW, member states have taken the initiative; the facility has 39 member states against 55 African countries, according to its 2023 report, raising USD 56.1 million in premiums.
Green bonds: Africa’s ticket to sustainable growth?
Additionally, African governments are also embracing sovereign green bonds as a means to raise finances for climate action and sustainability projects. Riding against the tide of lower credit ratings, African sovereign issuers (governments) raised USD 2.97 billion in green bonds in the first quarter of 2024. A green bond, Nachilala Nkombo, a climate finance advocate and the founder of Women Leaders on Climate Action (WLCA) in Zambia, explains, is a “fixed-income financial instrument whose proceeds are exclusively allocated to projects with environmental benefits.” Think of it as money earmarked for going green.
“ As of 2024, Africa had issued over 20 green bonds in countries such as Tanzania, Rwanda, Gabon, Seychelles, Nigeria, South Africa, Kenya, Morocco………the green bonds issued in Africa have funded climate mitigation and adaptation projects,” reads an excerpt of her analysis at Africa Policy Research Institute.
In her reflection, she highlighted that creating a green bond market would require strong and consistent collaboration between key sectors, including public and private sectors, locals and international financial institutions.
And it’s not just green bonds alone. Blue bonds, too, which the climate finance advocate explains as being focused on ocean conservation and blue economy, are in the offing, with Seychelles in 2018 becoming the first country to issue a sovereign blue bond, raising USD 15 million for its crucial marine sector’s conservation.
North Africa, on its part, the Great Green Wall project was started in 2007 by the African Union, seeking to restore an 8,000 km stretch of the Sahel from Senegal to Djibouti and halt desertification. About 30 million hectares have been restored and three million jobs created.
The promise and pitfalls of African-led financing
At ACS2.0, more climate-related solutions will be showcased as an approach to address droughts, flooding and extreme climate events. While there is debate about Africa’s role in driving and promoting such initiatives, Frederick Otieno, a programs officer with Nairobi-based Climate think tank, Powershift, believes the potential is undeniable — provided the continent tackles corruption head-on, invests in strong institutions, and channels resources where they will have the greatest impact. “Importantly, Africa must define its shortcomings and leverage its natural and human capital and strategically use them to bargain for better deals globally.”
