Sub-Saharan Africa urged to tap local capital for climate-resilient growth-Xinhua

Sub-Saharan Africa urged to tap local capital for climate-resilient growth

Source: Xinhua

Editor: huaxia

2024-05-30 00:51:00

NAIROBI, March 29 (Xinhua) -- Countries in sub-Saharan Africa should explore innovative ways to mobilize capital from local banks, government bonds and pension funds to accelerate climate-resilient growth, senior executives said on Wednesday.

Speaking on the sidelines of the African Development Bank (AfDB) annual meeting in Nairobi, Kenya, the executives said it is important for those countries to focus on the domestic market to address the shortfall in green financing.

Mphokolo Makara, head of energy and infrastructure for East Africa at Standard Bank Group, said that African capital markets and the private sector could help bridge the funding gap hindering climate action on the continent. "Both banks and indigenous enterprises can be mobilized to finance the development of infrastructure to facilitate the green transition. These green projects, if well-structured, can be profitable and sustainable in the long term," Makara said.

The 59th AfDB annual meeting, hosted by Kenya, has brought together over 3,000 delegates, including heads of state and government, finance ministers, central bank governors, representatives of regional blocs, industry leaders, academia and civil society. The five-day meeting, which concludes on Friday, is themed "Africa's Transformation, the African Development Bank Group, and the Reform of the Global Financial Architecture."

A key topic at the meeting, which coincides with AfDB's 60th anniversary, is mobilizing domestic resources to enhance responses to climate emergencies that have escalated across the continent.

Tshepidi Moremong, chief operating officer of Africa50, a continental infrastructure investment fund, said that leveraging domestic capital could help Africa become a green economy hub that fosters resilience and shared prosperity. Moremong called for a conducive policy and regulatory environment to encourage financial institutions to channel funds into green projects in sectors such as energy, manufacturing, agriculture and transport.

According to AfDB President Akinwumi Adesina, Africa receives only about 30 billion U.S. dollars in climate finance annually, far short of the 277 billion dollars required, which has slowed the continent's green transition.

Elizabeth Irungu, chief executive officer of Absa Asset Management, highlighted the importance of regulatory safeguards to protect investors in the green economy from potential risks. She said that policy reforms and a stable macroeconomic environment have encouraged banks to invest in projects aimed at accelerating low-carbon development in Africa.