Financing Africa’s just transition

In a world where African economies are grappling with the challenges of climate change, the need for financing the just transition to a sustainable future has become increasingly urgent. Despite this pressing need, there remains a trillion-dollar gap that needs to be filled. Standard Chartered Bank has released a report outlining some of the finance flows and gaps in this critical area. CNBC Africa recently sat down with Kweku Bedu-Addo, CEO of Standard Chartered Bank for Southern Africa, to discuss the report and shed light on the key issues at hand. Bedu-Addo highlighted the fact that both developed and developing markets are grappling with climate change challenges. While emerging markets require nearly 100 trillion dollars to fund the transition to net zero, advanced economies also need funding for climate mitigation and adaptation. The global nature of this problem underscores the need for collective action and collaboration across borders. One of the key challenges identified in the report is the discrepancy between promised funds from developed economies and the actual implementation on the ground. Bedu-Addo emphasized the need for patience in this process, as mobilizing such large sums of money takes time and coordination. He explained that the source of funding comes from various channels including savings, investments, and government grants, all of which require careful allocation and planning. The report also underscores the importance of innovative financing solutions and increased private sector involvement in driving the just transition. Bedu-Addo acknowledged that close to 100 trillion dollars cannot solely come from international investors and that domestic funding is essential. However, relying solely on domestic economies for funding could place a strain on household welfare and consumption. Finding a balance between international and domestic funding sources is crucial for success. When discussing the role of African governments in advancing climate adaptation, Bedu-Addo pointed out that there are immediate actions that can be taken to enhance resilience and preparedness. He highlighted the importance of protecting coastal communities, building resilience to unusual weather events, and improving disaster and public health management. By taking proactive steps to address these challenges, African governments can make significant strides in climate adaptation without solely relying on external funding. In conclusion, Bedu-Addo reiterated the importance of collaboration, dialogue, and patience in unlocking the necessary financing for Africa's just transition. By leveraging a mix of international and domestic funding sources, embracing innovative financing solutions, and taking proactive steps at the local level, African economies can make meaningful progress towards building a more sustainable and resilient future.