Africa Hits All-Time High in Climate Finance with $52.1 Billion in 2022 as Several Projects That Were Suspended Due to Covid-19 Relaunch
As part of its strategy to support youth entrepreneurship in Africa, the African Bank In 2022, Africa received $52.1 billion in climate finance, marking a 50% increase over the previous year. This record figure, achieved largely thanks to the revival of projects suspended during the COVID-19 pandemic, remains however well below the continent’s real needs.
A cyclical increase that hides a financing challenge
According to the report “Landscape of Climate Finance in Africa 2024” published by the Climate Policy Initiative, climate finance in Africa increased from $35.2 billion in 2021 to $52.1 billion in 2022. This increase was mainly driven by public financing, representing 82% of total funds. However, experts believe that this jump does not reflect a sustainable trend, but rather a cyclical recovery from the pandemic.
Public Financial Institutions Lead Contributions
Development finance institutions (DFIs), including multilateral organizations, are the largest contributors to climate funds in Africa, accounting for an average of 43% of total flows and 53% of official flows . In addition, the private sector has almost doubled its annual contribution, reaching an average of $8 billion for the 2021/2022 period. However, the participation of domestic African actors remains low, reaching only 10% of total financing.
Financing Needs: Four Times Current Level
To meet each country’s Nationally Determined Contributions (NDCs), Africa would require around $190 billion per year by 2030. To date, only 20% of this amount is mobilized annually. The scale of the financial challenge is therefore becoming critical, especially since without a significant increase in financing, future costs for the continent could explode.
Consequences of Inaction: A Long-Term Economic and Social Impact
Failure to act immediately to close the climate finance gap could cost up to 20% of Africa’s GDP by 2050 and up to 80% by 2100. Beyond economic losses, inaction would also lead to significant social costs: food insecurity, increased infectious diseases, ecosystem degradation, and increased climate conflict and migration.
Conclusion
This record $52.1 billion in financing is an encouraging first step for Africa in its fight against climate change. However, it represents only a fraction of the resources needed to meet the continent’s climate needs. Without increased mobilization of finance, both public and private, the continent risks facing devastating long-term impacts, both economically and socially. International commitment to increase climate finance flows to Africa is therefore essential to mitigate future risks and build sustainable climate resilience.
