Breaking Financing Barriers for a Just Climate Transition in Africa

The policy brief argues that climate finance for Africa is currently inefficient, insufficient, and unfair. It details five systemic barriers: unsustainable public debt, inadequate funding levels, high investor risk perception, currency fluctuations, and limited private sector engagement. To address these, the document recommends interventions including debt relief, low-cost long-term loans, credit enhancement schemes, foreign exchange guarantees, and a dedicated 'turbocharger facility' for African entrepreneurs and projects.

• Africa faces a severe public debt crisis that restricts its ability to fund climate action, with collective public debt reaching US$1.8 trillion in 2022 and increasing by 183 percent since 2010. In Sub-Saharan Africa, the average public debt-to-GDP ratio is 56 percent, leading some economies to spend more on debt servicing than on recurrent expenses.
• There is a significant gap in climate funding, with an estimated overall gap of US$2.8 trillion. Furthermore, 75 percent of the US$100 billion Paris Agreement climate finance pledge to developing countries has either been misdirected or not deployed.
• Private sector investment is underutilized, with every US$1 of public climate finance unlocking less than 30 cents of private capital. Barriers to private involvement include low awareness, high requirements, and a lack of support.
• Investment is hindered by high risk perception and currency volatility. Investors often view African climate projects as too costly or risky due to market conditions and unclear policies, while foreign exchange fluctuations limit capital flows or increase funding costs.

APA

Moors, R. (2023). Breaking Financing Barriers for a Just Climate Transition in Africa. African Center for Economic Transformation. https://acetforafrica.org/research-and-analysis/insights-ideas/policy-briefs/breaking-financing-barriers-for-a-just-climate-transition-in-africa/

Chicago

Moors, Rik. Breaking Financing Barriers for a Just Climate Transition in Africa. African Center for Economic Transformation, 2023. https://acetforafrica.org/research-and-analysis/insights-ideas/policy-briefs/breaking-financing-barriers-for-a-just-climate-transition-in-africa/.

Wikipedia

{{cite report |last1=Moors |first1=Rik |title=Breaking Financing Barriers for a Just Climate Transition in Africa |publisher=African Center for Economic Transformation |date=1 November 2023 |url=https://acetforafrica.org/research-and-analysis/insights-ideas/policy-briefs/breaking-financing-barriers-for-a-just-climate-transition-in-africa/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{moors2023breaking, author = {Moors, Rik}, title = {{Breaking Financing Barriers for a Just Climate Transition in Africa}}, institution = {African Center for Economic Transformation}, year = {2023}, month = nov, url = {https://acetforafrica.org/research-and-analysis/insights-ideas/policy-briefs/breaking-financing-barriers-for-a-just-climate-transition-in-africa/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }