New AfDB president must champion quality adaptation finance

BY SAADA MOHAMED SALA

A full plate awaits Sidi Ould Tah, the incoming president of the African Development Bank (AfDB).  

Africa’s Adaptation future looks bleak. Without urgent adaptation interventions, African countries are projected to incur losses of up to 3.8% of their GDP annually by 2100, even if global warming is limited to 1.5°C.   

For a continent already grappling with worsening fiscal balances and a skyrocketing debt crisis, this is detrimental.

The adaptation finance burden in Africa has steadily risen and is estimated to hit $50 billion annually by 2050.  

But even against this background, African countries receive only about 3% of global climate finance against the $277 billion they require annually to meet climate commitments in their Nationally Determined Contributions (NDCs) by 2030.   

Alongside the vast adaptation finance gap is the enormous financing gap of $200 billion annually to attain the Sustainable Development Goals by 2030.  

This is gravely concerning.

All is not lost, though.

AfDB’s climate leadership, commitment to Paris Alignment  

Over the last decade, the African Development Bank has demonstrated strong climate leadership, particularly in addressing Africa’s adaptation priorities.

By using the Paris Alignment as a guiding framework, the AfDB’s core operational strategy and institutional structure have a strong focus on climate action.  

The Bank’s ‘‘Climate Change and Green Growth Strategic Framework”, including its Action Plan for 2021-2025, outlines key financial commitments for climate action and investments that underpin the institution’s development mandate.   

These include an aggregate climate finance mobilisation target of $25 billion and ensuring that at least 40% of its overall annual finance is directed to climate action.  

It also includes mobilising $5.3 billion from the private sector for both adaptation and mitigation projects.   

The AfDB allocated 41% and 45% of its overall investment as climate finance in 2021 and 2022, respectively, surpassing its target.   

There is even more reason to be optimistic.   

The AfDB recently adopted a 10-year strategy until 2033, which builds upon its existing climate commitments. The strategy prioritises climate change action and finance.   

Prioritising adaptation finance  

For Africa, adaptation is not just an environmental necessity. It is a fundamental lifeline. It’s a necessity to facilitate inclusive growth and a climate-resilient development trajectory aligned with the African Union’s Agenda 2063.   

The Bank has pledged to allocate at least 50% of its annual climate finance to adaptation interventions in climate-sensitive sectors, bringing it on par with its allocation to mitigation finance.  

Looking ahead: urgent need to safeguard and advance adaptation finance gains 

This year marks a critical juncture for the AfDB with the election of a new president and an ambitious $25 billion target for the African Development Fund’s (ADF) 17th replenishment. 

ADF remains a key vehicle for expanding concessional and innovative financing mechanisms to drive impactful climate-resilient investments in Africa’s poorest countries in this critical decade. 

Replenishing the fund should, therefore, be an immediate priority for the incoming AfDB president.

President-elect Tah must go further and raise climate finance ambitions to protect hard-won adaptation gains. This includes supporting Africa’s call for the adoption of a needs-based adaptation finance goal in the delivery of the New Climate Finance Goal (NCQG) and the Baku to Belém Roadmap to $ 1.3 trillion.  

This ambition must prioritise grant-based public finance and highly concessional instruments to enable effective implementation of the UAE Framework for Global Climate Resilience. 

Why AfDB’s governance must be agile

With its African-wide governance network, developmental mandate, technical expertise and convening power, the AfDB has the strategic leverage to deepen its partnerships and scale up financing for Africa’s sustainable and resilient development.

This demands AfDB’s leadership to be agile to boost the Bank’s growing significant influence in shaping the global policy agenda, especially within forums like the G20.

This is particularly vital in the current multi-polar world with a challenging geopolitical landscape, marked by tariff wars and significant reductions in development aid, which threaten international cooperation.  

Thankfully, the 2025 AfDB’s AGM theme, “Making Africa's Capital Work Better for Africa's Development,” echoes a wake-up call for Africa’s financial independence.

Reforms must safeguard Africa’s financial and debt sustainability

AfDB, South Africa’s G20 Presidency and AU’s permanent G20 membership signifies a powerful trio that can amplify Africa's collective developmental priorities and showcase its potential as a key player in the global economy.

As such, they must work in unison to champion for acceleration of the international financial architecture reforms and the speedy implementation of the G20’s “Better, Bolder, Bigger’’ roadmap for the MDBs to meet the pressing continental development and climate goals

Moreover, South Africa’s G20 presidency focuses on debt sustainability as its priority agenda is timely amid the rising debt crisis and constrained fiscal space in the Global South.

The AU and South Africa should, therefore, leverage their G20 membership to lead a unified African push for endorsement and integration of Lomé Declaration on Debt in both the G20 and fourth UN International Financing for Development (FfD4) outcomes.

The Declaration seeks to review the current G20 Common Framework for Debt Treatments, and calls for a legally binding UN framework convention on sovereign debt. 

This is crucial for resolving the current debt challenges and unlocking new financing while safeguarding debt sustainability in Africa.   

He would have succeeded if President Tah could make Africa’s capital work for Africa’s development.