• Africa needs $2.8tr to implement climate action goals, NDCs by 2030
Experts have offered steps indebted governments can take to transform their financial management.
They pointed out that across sub-Saharan Africa, governments need to find funding to scale climate change hurdles or risk long-term negative socio-economic impacts.
They made this known in PwC Africa’s newly released report, ‘Financing Sub-Saharan Africa’s Climate Action: Implementing Green Public Finance Management (PFM) in Debt Distressed Countries’.
The report states that sub-Saharan Africa has a lower carbon intensity (the amount of carbon dioxide [CO2] emitted per unit of economic activity) than the global average and that of G7 developed nations, with the region contributing only three per cent of global greenhouse gas emissions.
However, despite this smaller emissions footprint, sub-Saharan Africa is the most vulnerable region, globally, to adverse effects of climate change.
“PwC is providing support to public sector clients on righting their fiscal trajectory through PFM transformation. This is a necessary step towards: freeing up domestic capital for the climate agenda; as well as creating transparency and confidence around the management of fiscal funds that international funders will look for,” the report states.
PwC Africa International Development Leader, Jon Williams, said the ongoing impact of the climate crisis already has many sub-Saharan African countries spending between two per cent and nine per cent of their fiscal budgets in unplanned allocations to respond to extreme weather events.
“In the case of the 2022 floods in South Africa’s KwaZulu-Natal and Eastern Cape provinces, the national government appropriated more than $430 million in disaster relief to support rebuilding and humanitarian efforts in these coastal provinces,” he said.
Partner, PwC Nigeria, Gbenga Adepetu, said African countries need around $2.8 trillion between 2020 and 2030 to implement their climate action commitments and Nationally Determined Contributions (NDCs).
He said: “Africa needs to spend money equivalent to 10 per cent of its GDP until 2030 to implement climate action commitments (the region currently only spends an equivalent five per cent of GDP on healthcare). It is, therefore, evident that the global supply of bilateral and multilateral funding is not nearly enough to cover this.”
“At the same time, African governments are also unable to finance their climate responses beyond the 10 per cent of cost already committed due to existing high levels of public debt.”
Government and Public Sector Leader for East Market Area, Benson Okundi, said there are key areas where governments can take action to increase revenue and reduce expenditure.
He stressed that debt restructuring, re-profiling and relief options are high on the agenda, as many countries, globally, faced crippling debt obligations in the wake of fiscal challenges brought on by COVID-19.
