African Export-Import Bank (Afreximbank) has pledged to support Africa to bridge the $250 billion climate finance gap in collaboration with other African financial institutions.
Denys Denya Afreximbank’s Executive Vice President, Finance, Administration & Banking Services made the pledge at the COP27 Conference hosted by the Arab Republic of Egypt in Sharm El Sheikh, .
Denya said: “African financial institutions, with Afreximbank at the forefront, need to step in and bridge the finance gaps. With the right support and commitment, Africa can in addition achieve the vision and goals of the AfCFTA, helping Africa’s population grasp the opportunities within it, and ensuring it plays a leading role in revitalising Africa’s climate adaptation and mitigation initiatives”.
He added: “The AFCFTA offers not just inter-county trading opportunities, but vast opportunities for collaborating on research, and investing in the continent’s large youthful and innovative population. African nations can leverage on these strengths as they decarbonise”
Denya urged African financial institutions to offer both financial and technical support which would then be targeted at curbing Africa’s greenhouse gas emissions, ensuring the achievement of the goals under the AfCFTA are not derailed.
Speaking on the effects of climate change on the continent during COP27’s decarbonisation day, Dr. Elias Kagumya, the Bank’s Chief Risk Officer, commented that it is high time Africa turned to the continent’s vast mineral resources to finance adaptation, loss and damage and build resilience in the continent. Dr. Elias added that, “With the world turning to clean energy technologies, the need for minerals like copper, lithium, nickel, cobalt and rare earth elements have and will continue to grow.”
The continent is endowed with a wide variety of minerals critical for the clean energy transition. The Democratic Republic of the Congo (DRC) is home to about 70 per cent of the world’s cobalt essential for batteries, mobile phones and electric cars production. Countries such as Zimbabwe and Namibia have among the largest reserves of lithium globally. Exploring these minerals would greatly support bridge Africa’s climate finance gap and change the fortunes of the continent’s poorest. Africa continues to be the least emitting continent, but the continent continues to battle unprecedented forest fires, droughts, soil erosion, landslides, cyclone, and floods, which are expected to get worse as temperatures rise. For example, in 2022 floods killed at least 600 people across Nigeria displacing 1.3 million people and in Somalia, over one million people fled their homes as a four-year consecutive drought devastated the East and Horn of Africa. For African governments and stakeholders, ensuring that the AfCFTA does consider a green transition is a huge mandate, and the implementation of the AfCFTA forms part of the larger solution to Africa’s climate change issues. However, critical financing is important to achieve this. And if done correctly, experts agree, AfCFTA can help in shaping the transition of African economies to green growth, climate adaptation and mitigation.