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African countries shouldn't have to borrow money to fix climate damage they never caused, says economist

As we approach the global annual climate change conference, , the need for increased public finance from the global north to address in Africa has become more urgent than ever.

However, framing the finance debate solely around this need risks deepening mistrust and downplaying the scale of the challenge. The financial burden of addressing climate change, coupled with limited fiscal space, creates a precarious situation for many African countries. African countries bear for causing the climate crisis. However, they to solve climate change problems.

Unfortunately, much external climate finance comes from . This only worsens Africa's debt burden. There is also not nearly enough money being channeled to Africa to pay for climate change adaptation.

At COP29, African negotiators will undoubtedly focus on reducing dependence on debt, and improving access to finance. I'm an economist who specializes in climate change and governance, with a long background at the United Nations and the African Union. Without robust commitments from public financial institutions, Africa will continue to face the dual crises of climate vulnerability and debt.

African countries must use COP29 to tackle systemic biases that inflate risk perceptions, minimize African achievements and inflate its problems. These biases drive up borrowing costs, and worsen .

The climate finance gap

The African Development Bank has estimated that Africa needs between in total climate financing every year between 2020 and 2030. This will enable African countries to meet their commitments to reduce greenhouse gas emissions, known as .

The Global Center for Adaptation estimates that Africa requires at least for adaptation every year until 2035. However, this figure could rise to . This is because data gaps allow for double counting of financial contributions. There is also very little transparency about the real amounts of climate finance being disbursed. Because nationally determined contributions are focused on mitigation, carbon depletion tends to be measured without accurate calculations of the amount of emissions that are captured, or carbon that is conserved.

The United Nations Development Program says that Africa's nationally determined contributions mean the continent needs about for climate mitigation. However, Africa contributes of all greenhouse gas emissions currently. It needs funds for adaptation to adjust to climate change that is already changing the lives of many, rather than for mitigation.

But only about half of the climate finance received by Africa in 2022 was for adaptation . The rest of the climate finance addressed mitigation or a mix of both, in line with the .

Worse still, , which need to be repaid. This will increase the financial strain on African nations.

Loans versus grants for climate change adaptation

Multilateral financial institutions such as the International Monetary Fund (IMF) and the World Bank, and the through their , handed out to Africa in 2022 for climate action. But most of this—US$5.4 billion—was loans. was grants, with a small fraction in equity investments.

These loans come with lower-than-market rates or extended repayment terms. But they still add to Africa's . African countries' debt repayments are as climate finance.

The says developed countries are responsible for financing climate adaptation in vulnerable regions. But loans that create a huge debt burden only enrich global financial institutions at the expense of African countries.

The effects of climate change are causing unprecedented floods, drought and other disasters across Africa. Yet it is becoming more difficult for African countries to access the climate finance they need to adapt to a warming world.

Why is the situation worsening?

First, access to climate finance remains a bureaucratic nightmare with complex application processes. There also needs to be more transparency in fund allocation. The recently established could assist. It is meant to channel money to countries worst affected by climate change to pay for the damage caused.

Second, the focus on reforming Bretton Woods institutions and development finance institutions developed countries have signed up for. This distracts developing nations from making reforms in trade, and that could drive more meaningful results.

Third, there is a lack of liquidity (access to fresh money) needed to propel investment or allow countries to bridge their budget deficits. African countries are forced to juggle paying for health care, education and infrastructure development with paying back debt. Some spend .

Increased tax efficiency and domestic savings, such as the savings maintained by , could be used. This should be the priority while the fight for better international conditions continues.

Fourth, the distinction between development finance and climate finance is becoming an impediment to progress. The conversation should move away from getting African countries to prioritize greenhouse gas emission reductions at the expense of other development priorities. Climate action is . The focus must be on excessive dependency on aid and rather promote market incentives to encourage the private sector to invest in climate adaptation in Africa.

Fifth, African negotiators must . For example, biased risk perceptions by credit rating agencies prevent African countries from securing finance. Restrictive prudential rules from the intended to preserve international financial system integrity have proven unfavorable to the transformation of the African economies.

Sixth, Africa should make use of and set up projects that benefit more than one country.

This will allow Africa to pool resources, coordinate demands and make it easier to negotiate better terms for climate finance. create an opportunity for countries to secure renewable energy funding for the transition from fossil fuel. Success will depend on effective coordination and regional solidarity in international climate negotiations.

Seventh, African countries have strong potential to use to finance climate initiatives, provided they have control over them. Nature-based solutions can go hand in hand with reforestation, sustainable land management or conservation, while generating carbon credits. These are additional funding opportunities for climate adaptation efforts in Africa.

This moment demands bold leadership and a united front to rewrite the rules. African countries must secure the commitments and resources at COP29 that are needed to build a sustainable future.