Climate Finance in Africa An overview of climate finance flows, challenges and opportunities

Climate change is arguably the greatest challenge facing humanity in the 21st century. Its impacts have significantly altered the natural world and affected global economic performance and human well-being. A recent study estimates that damage from climate change globally to farming, infrastructure, productivity, and health will cost an estimated $38 trillion per year by 2050 and see a 19 percent reduction of income (Kotz et al., 2024). As climate change impacts are being experienced globally, they are not evenly distributed, and Africa is projected to be impacted significantly more than other parts of the world. It is also a region with the least capacity to adapt to the impacts of climate change and contributes less than four percent of global greenhouse gas emissions (GHGs) (Global Carbon Budget, 2022). Yet, the disproportionate impacts of climate change in Africa are confirmed by several reports, including the World Meteorological Organization (WMO, 2022), which found that Africa’s average temperature has increased faster than other parts of the world, leading to an above average increase in sea level rise along African coastlines. This has increased the frequency and severity of coastal flooding, erosion and salinity in low-lying cities. Changes in climate will bring an increase in the frequency and intensity of extreme weather events, such as droughts and flooding. These impacts can reduce socio-economic development at the community and household levels, a worrying trend for a continent that depends heavily on its natural resource base for livelihoods.