By Uche Usim
Dr. Akinwumi Adesina, the President of the African Development Bank (AfDB), has called for pragmatic strategies to mitigate the scathing impact of climate change on Africa.
At an interview with BBC yesterday, he expressed worries that despite contributing only 3% of global emissions, Africa faces significant financial losses, estimated between $7 billion and $15 billion annually, due to climate change.
These losses, he highlighted, severely affect agriculture and economies across the continent.
In response to these challenges, he said the AfDB has launched several ambitious initiatives to build resilience and promote climate adaptation.
The bank has committed to doubling its climate finance to $25 billion by 2030, particularly through the African Adaptation Acceleration Programme, which aims to deploy the same amount for climate adaptation projects, marking it as the largest global effort of its kind. Additionally, the AfDB has established a climate action window with an initial investment of $429 million, expected to increase to $13 billion, to support vulnerable countries with services like crop insurance, land restoration, and climate information.
Innovative financial mechanisms have been pivotal in these efforts. For instance, the AfDB uses partial credit guarantees, enabling countries like Benin, Senegal, and Cote d’Ivoire to secure substantial capital at lower interest rates. Benin, for example, raised $400 million from Chinese investors using a $195 million partial credit guarantee. Similarly, Egypt’s issuance of Panda Bonds facilitated by the AfDB allowed it to raise $500 million from Chinese markets. These innovations help reduce borrowing costs and encourage long-term investments in climate resilience.
Despite these proactive measures, Adesina emphasized that the global financial architecture needs to be reformed to better serve Africa’s interests. He also stressed the importance of optimizing the use of Special Drawing Rights (SDRs) for the continent.
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