Africa: Economic recovery may be long but could be transformative
Africa's economic recovery may be long but it could be transformative, states a new report.

It is estimated that climate change is impacting negatively on Africa’s GDP by 2.8% every year (around $100 billion).

In order to tackle climate change challenges in Africa, financing solutions have to be developed not only through external financial flows but also through the development of specific and more appropriate instruments that fosters sustainable development.

As the continent commence the implementation of the African Continental Free Trade Agreement (AfCFTA) early next year, it is timely to unlock new funding arrangements to finance sustainable projects and sectors that build Africa’s long-term competitiveness and resilience. 

To this end, Agence Française de Développement (AFD) and the African Export-Import Bank (AfreximBank) have announced a new facility agreement for a €150 million financing programme. This will support Afreximbank in the implementation of its new climate finance strategy which will target green, low carbon, socially inclusive and more resilient investments across Africa

Climate change finance strategy

 As part of its financing programme, AFD has made available a €500,000 grant to carry out a technical assistance programme. It will support Afreximbank in developing its sustainable finance strategy.

By doing so, this strong partnership between the two institutions will promote the dissemination of innovative financing mechanisms for the sustainable development of the African continent.

The agreements were signed by the Executive Vice-President of the African Export-Import Bank, Amr Kamel, with Dr Fabio Grazi, Director of AFD country office for Egypt.

Speaking during the signing ceremony, Kamel said the facility signed with AFD was a huge opportunity for climate finance for African countries. “It will create value from environmental assets and promote climate-friendly investments to support African governments and African companies in their pursuit of infrastructure investments and will sustain their social and economic development.”

On the occasion of the signing, Dr Grazi indicated that: “Today’s agreement reaffirms AFD’s and Afreximbank’s commitment to propel the strategic partnership between our two institutions to new heights in support of Africa’s sustainable and inclusive economic development. The signing of this new agreement bases upon the shared vision that mainstreaming climate change and sustainable development goals into Africa’s financial sector is critical to tackle the challenges ahead and realise the opportunities available for the African continent.”