Unpacking The Opportunity For Climate Philanthropy In Africa

Business leaders, the development finance community, and governments in Africa require deep insight into the challenges and opportunities where philanthropic investment can support countries that are most vulnerable to the impacts of the climate crisis.

The entry points for six countries were revealed today, in new reports providing political economy analysis of six countries – Nigeria, South Africa, Kenya, Ethiopia, Ghana, and Senegal – published by Africa Practice and ClimateWorks Foundation.

The inaugural research, entitled Introductory Political Economy Analysis of the Climate Philanthropy Space, assesses the political, institutional, and sector-driven impact of carbon emissions in Nigeria, South Africa, Kenya, Ethiopia, Ghana, and Senegal, respectively. 

Leveraging Africa Practice’s deep contextual knowledge and intelligence network of in-country experts diversified across the continent, the new research highlights risks and opportunities surrounding urbanization, electrification, industrialization, land use, and oil & gas.

The findings revealed that:

• Nigeria’s reliance on petrodollars, coupled with weak governance and insecurity, has undermined national commitment to climate change policy. But the commercialization of natural gas would enable Nigeria to scale back flaring and reduce its reliance on imported fuel oil. Investment in renewables could further boost the grid and shift the energy mix.

• South Africa’s reliance on coal, coupled with the indebtedness of utility company Eskom, has stymied the country’s energy transition. However, electricity generation reforms, enabling private sector investment in independent power projects, indicate the possibility of a green future for the continent’s most industrialized nation.

• Kenya has historically been one of the top recipients of philanthropic climate finance; however, government commitment has been limited and corruption hangs over international investments. Electrification is the country’s most promising sector, in light of Kenya’s geothermal power potential. 

• Ethiopia has demonstrated considerable thought leadership on environmental policy over the past decade, reducing emissions and expanding renewable energy generation. However, substantial political volatility in the wake of fundamental governance changes has derailed climate change policy-making. The appointment of a new government provides an opportunity for renewed engagement, particularly around green urbanization and land use.

• Ghana’s political stability and the commitment to mainstream climate change across government create extensive opportunities for climate philanthropy, particularly on urbanization – where the city of Accra is working to manage air pollution – and land use – with the cocoa industry under pressure to curb deforestation.

• Senegal has been working closely with international partners to integrate climate adaptation measures into its decision-making in recent decades, while also investing heavily in renewable energy generation. The combination of President Sall’s commitment to electrification and delays to the development of offshore oil and gas reserves provide an opportunity for renewed engagement around solar and wind projects.

Policies and investments to prepare and adapt societies, economies, and ecosystems are mission-critical for Africa’s future and resilience. Africa’s climate crisis threatens businesses, livelihoods, and the development gains the region has made over the years. As such, financial flows for adaptation and mitigation are essential to unlock the full potential of Africa’s economies.

Tewodros Sile, Associate Director, Africa Practice, said: “Whilst Africa remains at the forefront of the climate crisis and its effects, this is equally matched by the opportunities to identify, finance and execute a range of catalytic climate adaptation solutions. The political economy analysis reports we are publishing with ClimateWorks will play an important role in identifying solutions and opportunities for growth across six key African markets.”

Surabi Menon, Vice President, Global Intelligence, ClimateWorks Foundation, said: “Countries across Africa are projected to face more severe consequences from climate change in the coming years, while they also grapple with significant development challenges as well as fallouts from the COVID-19 pandemic. Africa Practice’s political economy analyses of six countries in Africa will help climate philanthropy identify investment opportunities that could deliver real change in ways that simultaneously advance climate, sustainability and development goals across the continent.”