By Etuka Sunday
The African Export-Import Bank (Afreximbank) and Agence Française de Développement (AFD) in Cairo jointly organized an online seminar on scaling up climate finance in Africa as part of their shared effort to foster sustainable development as the continent recovers from the COVID-19 pandemic. The event was hosted by Professor Benedict Oramah, President and Chairman of Afreximbank, and Rémy Rioux, Chief Executive Officer of Agence Française de Développement and Chairman of the International Development Finance Club (IDFC).
The event aimed to increase participants’ knowledge of the opportunities and challenges associated with aligning economic development and climate finance to strengthen sustainability and resilience across Africa. The discussions emphasized the leading role of Public Development Banks (PDB) in greening the financial system in Africa and the importance of partnerships between PDBs to scale up sustainable development investments. Recommendations from the seminar will be discussed during the “Finance in Common” (FiC) Summit to be held November 11-13, 2020.
The attendees agreed that the creation of the African Continental Free Trade Agreement (AfCTA) will help nations across the continent deliver long-term sustainability, development, and security, which will be boosted by cross-sector collaboration, financial partnerships and the promotion of trade.
The COVID-19 pandemic has highlighted the need to reinforce resilience across African nations. Participants in the event agreed countries should aim to increase their capacity to face external shocks, reduce dependence on a small set of commodities and accelerate low carbon growth. They emphasized the importance of unlocking new resources to finance sustainable investment that enhance Africa’s long-term competitiveness and resilience. It is estimated that the negative effects of climate change in Africa are already depressing the continent’s GDP by 2.8% annually (around USD 100 billion). In order to tackle climate challenges in Africa, availability of new funding dedicated to climate finance and sustainable development was identified as a priority. Through their ability to mobilize and channel financing, PDBs have a yet untapped opportunity to act as a catalyst in the transformation of the financial system towards climate action and SDG promotion.
Prof. Benedict Oramah, President of Afreximbank, said: “Though Africa contributes less than 4% of global CO2 emissions, it remains the most vulnerable region to the adverse effects of climate change. Droughts and floods have increased in frequency over the last two decades and risk undermining the continent’s economic progress.
Climate mitigation and adaptation projects are often inhibited by the inconsistent accessibility of funding – caused by a lack of clear policies and regulatory frameworks on climate change. Too much bureaucracy, as well as a lack of clarity, are holding us back when progress is vital. For Africa to fulfil its ambitious economic aspirations, African governments, development institutions and the international community must work in concert.
Our continent’s economic progress need not be slowed by climate action – in fact, the achievement of the UN SDGs can galvanize our economies and marshal the best of entrepreneurship and collaboration. We welcome this opportunity and wish to affirm our strong support for climate initiatives. There can be no better partner than AFD, which has the skills and commitment to drive the change we need.”
Rémy Rioux, Chief Executive Officer of Agence Française de Développement stated the following:
“The partnership between Afreximbank and AFD, built over the past 5 years, is a shining example of effective coordination of Public Development Banks (PDBs) based on shared objectives, supporting the development of African economies and mainstreaming the fight against climate into our financial activity.
As we face the Covid-19, I am convinced that the 450 PDBs that operate around the world, including 95 across Africa, at sub-national, national, regional, international and multilateral levels, could further contribute to scaling-up climate finance for sustainable development. In this endeavor, PDBs will gather for the first time ever on November 12th in Paris at the Finance in Common Summit to design new forms of prosperity that put people and planet first. By forming a coalition of financial actors, PDBs could bring timely and coordinated responses to global challenges”.