…as current climate financing covers only 11% of continent’s needs

…Africa’s debt rises to $655bn, highest in decades

Africa’s elusive economic growth and development will only be addressed if significant resources are mobilised into the economic sectors of the continent that currently perform poorly, according to The Mo Ibrahim Foundation, premising this on the huge gap between the resources currently available to countries on the continent and what they actually need for meaningful development.

The Foundation, in its latest report on Africa, noted that the countries in the continent will require between $1.3 trillion and $1.9 trillion annually to meet the Sustainable Development Goals (SDGs) 2063, stressing that the earlier annual estimate of $829.7 billion was grossly understated.

The report, titled “Financing Africa: Where is the Money?”, said Africa has a long way to go in four priority areas which are economic transformation, capacities of government and financial institutions, climate change preparedness, and living standards.

“We need a complete change of paradigm. This is not about Africa coming to the developed world with a begging bowl and developed countries considering how much more they can pledge. This is about smarter money, not just more money. As this report outlines, the money is already there. But current processes prevent resources from being used to properly address the challenges,” said Mo Ibrahim, Founder and Chair of the Mo Ibrahim Foundation.

“Steps must be taken to reform the international financing system and update African debt structuring, risk assessment and mitigation and aid conditionalities. Even more, our continent must stop squandering its own assets and take proper ownership and responsibility. In short, we must apply good governance to ensure these assets are adequately leveraged for the best interests of our people,” he said.

The Mo Ibrahim Foundation is an African organisation providing an African voice on current global challenges. It provides data and analysis to assess these challenges at the continental level, bringing together Africa’s stakeholders, including its youth, to discuss potential solutions, grounded in sound leadership and governance.

On climate change, the report noted that only 49 percent of the climate finance commitments made by bilateral providers between 2013 and 2021 was reported as disbursed. As of 2022, available records showed that 25 different climate funds committed $8.8 billion for climate action in sub-Saharan Africa.

Mo Ibrahim urged African countries to set their priorities right when it comes to climate financing. This is because in Africa, climate adaptation far outweighs mitigation, adding that the adaptation needs of sub-Saharan Africa alone amounted to $579 billion between 2020 and 2030.

The MacArthur Foundation had earlier warned the Nigerian government on the huge amount the country lost to climate change. In its 2023 report, the organisation said Nigeria lost $100 billion to climate change a decade to 2020, and that if urgent actions were not taken, the country’s losses could rise to as much as $460 billion by 2050.

In the estimate of the Africa Development Bank (AfDB), the continent loses between $7 billion and $15 billion to climate change annually, and this is set to rise to $50 billion annually by 2050.

“Largely underestimated, Africa’s adaptation priority is not reflected in NDCs financial needs. Because of the Paris Agreement’s focus on reducing emissions globally, NDCs mostly target mitigation, even though this is not a short-term priority in the specific context of Africa, a net-carbon-sinking continent,” Mo Ibrahim Foundation stated.

According to the United Nations, the Nationally Determined Contribution (NDC) is a climate action plan to cut emissions and adapt to climate impacts. Each Party to the Paris Agreement is required to establish an NDC and update it every five years.

In terms of Official Development Assistance (ODA), which is government aid that promotes and specifically targets the economic development and welfare of developing countries such as Nigeria, Africa’s share dropped from 36 percent in 2021 to 28.3 percent in 2022. Europe emerged as the only region with higher ODA.

The report further states that 37.1 percent of the ODA for Africa came from non-Development Assistance Committee (non-DAC) countries. It singled out Saudi Arabia as among the ten largest non-DAC donors to Africa, adding that health and education remain the main priorities of ODA to Africa from official donors.

In terms of inflows into Africa, the report lists Egypt, Ethiopia, Nigeria, DR Congo, Kenya, Tanzania, Mozambique, Morocco, Uganda, and Niger as the largest recipients, having collectively received 46.4 percent of the total ODA inflows into Africa within the reference period, while São Tomé and Príncipe, Cabo Verde and Djibouti are the highest recipients in terms of ODA per capita.

The report states that Africa performed poorly on the UN’s Sustainable Development Goals (SDGs). With the deadline of 2030 fast approaching, the continent has made progress in 2 out of the 17 SDGs whereas the worst performing indicators are Goal 2, which is zero hunger, and Goal 3, which is good health and well-being.

The report adds that 50 out of 54 countries are classified as “facing major challenges”, and the remaining 4 countries as “facing significant challenges”.

African countries have equally piled up more debts, which rose from $220 billion in 2009 to $655 billion in 2022. In 2024, 18.6 percent of Africa’s revenue went into debt servicing, the highest among the continents of the world. Asia, with more population, only serviced debts with 14.1 percent of their revenue. It was 11.8 percent for countries in Latin America and the Caribbean.