Unlocking Climate Finance Potential for Climate Adaptation: Case of Climate Smart Agricultural Financing in Sub Saharan Africa

Abstract

Climate change has emerged as one of the greatest challenges faced by the world today. Adverse impacts of climate change are visible across sectors like agriculture and other natural resources due to increasing average temperature and changing weather patterns. Africa constitutes around 13% of the global population but contributes the least (around 2%) to greenhouse gas (GHG) emissions globally. Concerning the global climate vulnerability index, Africa is most impacted (around 21%) by climate change and its’ population is most vulnerable to climate sensitivity and fragility of the continent’s natural environment and increasingly erratic weather patterns, low adoption of climate-resilient technologies, and high dependence on environment-based livelihoods. Hence, Africa needs to adopt low carbon and climate-resilient development to address climate-related issues and to have sustainable development. In line with the low carbon/climate-resilient development agenda, 53 countries (except Libya) have submitted Nationally Determined Contribution (NDC) and have set ambitious targets under NDC and Sustainable Development Goals. A quick analysis of the NDCs and various studies indicates the enormity of the financing needs. According to Climate Invetsment Funds (CFI), Sub-Saharan Africa will require an estimated USD222 billion for climate resilience investments to reach its NDCs. One of the critical stakeholders to play a key role in meeting the financing needs of climate-smart agriculture (CSA) related targets is the private sector. There is around 98% gap in financing for CSA. Even though substantial climate finance potential exists in selected countries for the private sector, there are certain challenges and barriers like financial, policy, lack of awareness, and low provision for climate funding in the national budget.