Africa possesses some of the planet’s most effective natural systems for capturing carbon, yet the continent contributes only a small fraction of global carbon offset supply despite its vast ecological potential. While African ecosystems absorb more than 600 million metric tons of carbon dioxide annually—surpassing any other forested region—the region accounted for just 11% of issued carbon credits between 2016 and 2021, with only 3% tied to its natural sinks. n nThe continent faces a climate financing shortfall estimated between $2.5 trillion and $2.8 trillion by 2030, covering both mitigation and adaptation needs such as transitioning to clean energy and building resilience against extreme weather. However, current funding flows fall significantly short. Projections suggest that by 2050, Africa could represent one-fifth of the global gap in adaptation financing, even though it emits less than 10% of global greenhouse gases. n nAlarmingly, the nations most exposed to climate risks are not receiving proportionate support. None of the ten countries most vulnerable to climate change rank among the top recipients of adaptation funding. For instance, Niger, Sudan, Liberia, and Mali collectively received only $118.01 million—5.3% of the total distributed—while six of the most at-risk nations received no funding at all. This disparity reveals systemic imbalances in how climate resources are allocated. n nAlthough Africa currently captures around 16% of the global carbon credit market, its participation remains far below its ecological capacity. The Africa Carbon Markets Initiative (ACMI), launched with backing from the United Nations Economic Commission for Africa, aims to change this trajectory by increasing annual carbon credit production from 22 million tons in 2021 to 300 million by 2030. If successful, this could generate $6 billion in revenue and create up to 30 million jobs. n nLocal efforts are already demonstrating impact. Access Bank’s Save Wildlife project in Nigeria has supported the planting of over 100,000 trees, contributing to carbon capture and community livelihoods. Meanwhile, Gabon made history in 2021 as the first African nation to receive performance-based payments under the Central African Forest Initiative, securing $17 million for rainforest conservation—a model showing how international cooperation can reward climate stewardship. n nTo scale these efforts, Africa must develop robust, transparent carbon markets. Key elements include project developers focused on both environmental and social outcomes, financial instruments like those from the African Development Bank to stimulate supply, rigorous verification processes, and market intermediaries to expand global reach. Capacity-building for regulators and governments is also essential. n nBeyond carbon credits, sustainable finance tools such as green bonds, blended finance models to attract private capital, and cross-border partnerships promoting cleaner fuels like LPG can further support low-carbon development. Projects like Nigeria’s Montane Forest initiative illustrate how combining community involvement, training, and scientific methods can yield lasting benefits for people and ecosystems alike. n
— News Original —nSustainable finance’s role in Africa’s carbon sequestrationnDespite Africa’s huge carbon sequestration potential, the continent accounts for a disproportionately small share of global carbon offsets. n nAfrica has a climate finance need upward of $2.5 trillion by 2030, but the countries most vulnerable are not receiving proportional adaptation finance. n nProgrammes to boost carbon credit production could unlock billions of dollars in revenue and millions of jobs. n nAfrica stands at a pivotal crossroads in the global struggle against climate change. The continent, though responsible for less than 10% of global greenhouse gas emissions (GHG), is home to some of the world’s most powerful carbon sinks. Collectively, these natural assets absorb or sequester over 600 million tonnes of carbon dioxide every year, more than any other forest ecosystem on earth. n nDespite this net contribution, Africa accounts for just 11% of carbon offsets issued between 2016 and 2021, with a strikingly small 3% linked to the continent’s natural carbon sinks. According to Morgan Stanley, the voluntary carbon offset market is projected to expand from $2 billion in 2020 to around $100 billion in 2030. n nIn this context, Africa’s potential for carbon sequestration must be fully realized to manifest sustainable development outcomes across the continent. n nThe Sustainable Development Impact Meetings, convened by the World Economic Forum and leading climate organizations, offer a unique and urgent platform to address these challenges. These meetings can spotlight the untapped potential for sustainable finance to transform Africa’s land-based carbon sequestration landscape, particularly in the space of carbon markets. n nAfrica’s climate finance gap n nAfrica’s climate finance needs are estimated at $2.5-$2.8 trillion by 2030. These needs cut across both mitigation and adaptation; from shifting to low-carbon energy systems and conserving natural sinks, to strengthening resilience against droughts, floods and changing agricultural zones. n nYet, today’s finance flows fall far short of this mark and by 2050, there is a high possibility that one-fifth of the projected global adaptation funding gap will be in Africa, based on current trends. n nAgainst this backdrop, a very different trend is unfolding: the countries most vulnerable to climate change are not the ones receiving the largest share of global adaptation finance. n nNone of the world’s 10 most climate-vulnerable countries are among the 10 largest recipients of adaptation finance. Economies such as Niger, Sudan, Liberia and Mali received only $118.01 million combined, just 5.3% of the disaggregated total, while six of the top ten most vulnerable received nothing at all. n nThis misalignment underscores the inequities in climate finance, where fragility and exposure do not necessarily translate into funding access. n nAfrican participation in carbon credits market n nAfrica’s carbon markets are beginning to make a difference, showing momentum, rapid growth and attracting global interest. However, Africa’s participation in global carbon markets remains disproportionately low; currently, the continent captures only around 16% of the global carbon credit market. n nThis mismatch between potential and actual participation highlights the urgency of expanding sustainable finance mechanisms that align global investment flows with Africa’s natural strengths. n nEmerging and sustainable finance solutions n nThe gaps in climate finance and carbon markets are clear, but solutions are beginning to emerge. The Africa Carbon Markets Initiative (ACMI) is an ambitious step in that direction. n nBacked by the United Nations Economic Commission for Africa and championed at COP27, ACMI targets an increase from 22 million tonnes of carbon credit production in 2021 to 300 million tonnes by 2030, potentially unlocking $6 billion in revenue and 30 million jobs. n nAlongside ACMI, localized projects are also making a difference. The Save Wildlife project by Access Bank in Nigeria has helped communities plant over 100,000 trees, sequestering carbon while improving livelihoods. n nAt the national level, Gabon set a precedent in 2021 by becoming the first African country to receive payments for reducing carbon emissions under the UN-hosted Central African Forest Initiative. The $17 million disbursement supports efforts to conserve its vast rainforests, showing how international partnerships can reward effective climate action. n nScaling Africa’s carbon sequestration potential n nAfrica’s carbon sequestration potential is enormous but under severe threat from deforestation and land degradation. Between 2013 and 2023 (10-year period), over 300 million tons of carbon were released in Lagos, the commercial centre of Nigeria, alone due to urbanization, agricultural expansion and wetland loss. n nYet, Africa’s forests, wetlands and mangroves remain vital carbon sinks with immense value for global climate stability, with potential to sequester over 6 billion tonnes in a 10-year period. n nTo fully harness this potential, Africa must build high-quality and high-integrity carbon markets, grounded in: n nProject developers committed to both climate and community benefits. n nCatalytic financial instruments, such as African Development Bank’s carbon support programmes, to unlock supply. n nStrong verification systems to ensure credibility and trust. Market makers and traders who expand Africa’s share of global offsets. n nCapacity-building that equips governments and regulators with the tools to scale. Projects such as Nigeria’s Montane Forest Project show how community engagement, training and scientific research create durable benefits for people and ecosystems. n nBeyond carbon markets, sustainable finance must scale alternatives such as green bonds to fund clean infrastructure, blended finance to de-risk private investment, and cross-border partnerships to accelerate clean fuel adoption like LPG (Liquefied Petroleum Gas).