Protestors calling for climate action.Photo|courtesy
Management consulting firm European House Ambrosetti has called for significant increases in private sector financing to address the mounting challenges of climate change in Africa anchored on climate action.
Its CEO of African Operations Pietro Milini who spoke at a climate finance forum emphasized the pivotal role of both public and private sectors in mitigating the risks posed by climate change.
“While public sector investments are essential, the private sector must also play its part,” said Milini.
“In Africa, the private sector is a dominant force, employing 90% of the workforce and contributing two-thirds of investments on the continent, according to the African Union.”
Milini noted that climate finance from the private sector has doubled in recent years, but remains far below the levels mobilized by public and multilateral agencies.
According to Milini, there is a need for the private sector to ramp up its involvement to address the full scope of climate risks in Africa.
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He highlighted the importance of small and medium-sized enterprises (SMEs), which represent 50% of Africa’s GDP.
These businesses, he argued, are poised to become global leaders in their respective industries, with many contributing to solutions to the continent’s climate challenges.
The organization pointed to the impressive growth of African capital markets, which have seen a 500% increase in combined capitalization over the last 20 years.
This surge signals growing investor confidence in the region, which think tank believes can be harnessed to fuel climate resilience efforts.
According to Milini,Africa needs between $30 billion and $50 billion annually to meet its climate goals.
This, he explained, represents a significant portion up to 10% of national budgets already allocated to climate adaptation and mitigation efforts by African countries.
In light of Africa’s minimal contribution to global greenhouse gas emissions, Milini underscored the disproportionate impact of climate change on the continent, which bears the brunt of environmental consequences despite its relatively low carbon footprint.
