What Africa Got Right (and Wrong) in 2025

• Two years after the much hyped 2023 Nairobi Declaration, climate financing across Africa remains work in progress, often marked by painful delays.
• Across the continent, data shows financing for renewables is the only segment that recorded increased adaption funding.
• Only a handful of African countries receive over 50 percent of climate financing.

For the last 12 months, climate financing for Africa remains a big challenge even though there was notable progress in the previous cycle (2024) where reports showed a slight increase in some areas. However, while commendable, the increase did not bring climate financing in Africa even close to the needed amount nor meet the pledges that were given during the much hyped 2023 Nairobi Declaration.

Titled ‘Landscape of Climate Finance in Africa 2024’ this latest report that was launched on the sidelines of the annual International Monetary Fund and the World Bank Group meeting, shows a significant climate finance gap, despite the said uptick.

The report shows gaps not only in the funding but also in tracking said funding. Of the required amount to implement Africa’s Nationally Determined Contributions (NDCs) and meet 2030 climate goals, only 23 percent of the estimated annual funding is being tracked, the report notes.

The report, which is the first one after the CPI and FSD Africa assessment of climate finance that was released in 2022, it commends the increase in funding. For instance, Multilateral Development Finance Institutions (MDBs) issued $19 billion which represented 43 percent of the total financing, having increased from $11 billion that was given two years before.

To date, MDBs remain to be the largest providers of climate finance in Africa. Notably, of the said climate funding for Africa, 90 percent came from international sources.

Another positive increase came from private sector finance which is reported to have doubled from $4 billion to $8 billion, but nonetheless, it still accounted for only 18 percent of the total. Of all the funding, at $14 billion,  clean energy finance represented almost a third of the total climate finance.

The report calls attention to a disturbing fact, that “this rate of growth is insufficient considering Africa’s need for USD200 billion annually to transition to clean energy, as estimated by the International Energy Agency.”

As for Multilateral Climate Funds (MCFs) they come in at a low 2 percent of the total climate finance and are mostly concessional funds given to Least Developed Countries (LDCs).

What is even more worrisome is the fact that even with the less than adequate funding, this minimal amount is given to but a handful of African nations. “There are major regional disparities, with 10 countries accounting for 50 percent of Africa’s total climate finance flows. South Africa, Egypt, and Nigeria received more than half of the private financing.”

At the end of the day, none puts the climate funding for Africa situation into perspective better than Barbara Buchner, Global Managing Director of CPI; “While it’s encouraging to see increased climate finance flows to Africa, the rate of growth is too slow.

Public policy and investments must be more effective, and both domestic and international private capital must no longer remain on the sidelines. Otherwise, Africa’s economic opportunities will be overshadowed by significant economic losses and social consequences.”

Also Read: Africa’s SMEs: How Policymakers Can Speed Up Growth and Innovation

Climate financing: Africa can offer global solutions

Two years down the road from the Nairobi Declaration that was issued at the end of Africa Climate Summit in September 2023, climate financing for Africa remains to be a challenge.

Even though world leaders at the event spent most of the time discussing  how to mobilize financing to adapt to climate change conditions like extreme weather, as the 2024 progress report showed, little ground has been made with exception of slight increase for renewable energy solutions.

The stand of African countries is clearly articulated in the Nairobi Declaration; “major polluters commit more resources to help poorer nations.” The Nairobi Declaration calls for “a global carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation, and a global financial transaction tax.”

“Implementing such measures at a global level financing for climate-related investments and insulate the issue of tax raises from geopolitical and domestic political pressures,” the Nairobi Declaration declares.

This is because, while all the world suffers from effects of global warming due to climate change, and more so Africa, the continent has only contributed but a fraction of all historic CO2 emissions which are mostly generated by the United States, Europe, China and India.

This is because, while all the world suffers from effects of global warming due to climate change, and more so Africa, the continent has only contributed but a fraction of all historic CO2 emissions which are mostly generated by the United States, Europe, China and India.

This is because, while all the world suffers from effects of global warming due to climate change, and more so Africa, the continent has only contributed but a fraction of all historic CO2 emissions which are mostly generated by the United States, Europe, China and India.

The Intergovernmental Panel on Climate Change (IPCC) is clear on the issue; “Africa is suffering some of the worst impacts of climate change, including multi-year droughts, flooding and lower crop yields.”

While Africa suffers due to CO2 emitted elsewhere, the responsible countries are still lagging in funding the needed adaption solutions. IPCC underscores this fact, reporting that; “As the impact of climate change accelerates across the continent, Africa is only receiving about 12 percent of the financing it needs to cope.”

The problem doesn’t end there, while Africa is not receiving the pledged climate financing, the Climate Policy Initiative says African countries are also paying higher price when they borrow for climate financing adaption.

“Their borrowing costs are five to eight times higher than those of wealthy countries, creating further debt that prevents them from investing more in climate change mitigation. In Africa, we can be a green industrial hub that helps other regions achieve their net zero strategies by 2050. Unlocking the renewable energy resources that we have in our continent is not only good for Africa, it is good for the rest of the world,” Kenyan President William Ruto advised world leaders at the Climate Summit pointing out a key fact, rather than just receiving funding to adapt, Africa can actually lead the world in solving the climate crisis.