Based on your extensive experience in climate action and finance, what are the top three strategies that governments can prioritise to access much needed climate finance?

First, governments should review and revise their nationally determined contributions (NDCs)¹ for 2025, integrating these NDCs into their national development plans. A broad-based approach to climate action extends beyond environmental sustainability: it intersects with sustainable development. This means coming up with comprehensive whole-of-government development strategies that encompass different sectors of their economies. Development considerations could include water source protection and its delivery to urban centres, especially those facing high levels of rural-urban migration. Other approaches might include a more innovative agricultural production strategy that combines both adaptation and agroforestry initiatives.

Second, emerging markets should take this chance to align their NDCs and development plans with more targeted investment strategies for climate finance. There has been an exponential growth in climate finance from both private and multinational sources. Governments should leverage this by engaging not only with multilateral climate funders, such as the European Commission’s Just Transition Fund and other adaptation funds, but also by tapping into private sector financing. Over 75% of climate finance now originates from the private sector, so we need to see a more targeted approach to capitalise on this majority funding source.

This is timely as countries prepare for the 29th Conference of the Parties (COP29) of the United Nations Framework Convention on Climate Change (UNFCCC), which will take place in Azerbaijan in November. Parties to the UNFCCC are set to agree on a New Collective Quantified Goal (NCQG) after the current annual goal of US$ 100 billion ends in 2025.

Third, projects selected for NDC inclusion must present a clear investment opportunity when viewed from an investor’s perspective. African countries in particular have missed out on opportunities because this has not been as well understood. One example is an African government project that proposed expanding its telecom sector capacity, but faced challenges from investors as the project’s term sheets were not suitably prepared.

Revising NDC submissions that include clear investment cases and strategies for adaptation and resilience will strengthen capital flow into emerging markets. A targeted approach to incorporating private capital will be crucial, as it represents most of the available climate finance, not only those limited funds available through UNFCCC-based mechanisms.

Over 75% of climate finance now originates from the private sector.

What are the key capabilities that states need to design and deliver effective climate and development plans?

Coordination is key. Preparing NDCs is not only a Ministry of Environment concern. It needs good coordination to bring together inputs from many ministries, including Finance, Economic Development, Planning, and others. Furthermore, elevating NDC-drafting to the most senior levels of government ensures a more whole-of-government approach that reflects the wider needs and opportunities in the country—not just of those involved in the final NDC negotiations.

The second capability is not so much a specific skill as the broader capacity to assess and derisk projects that require financing. Governments need to support the growth and development of institutions in their own domestic capital markets. Only then can emerging market actors be deemed capable enough to derisk projects, which will afford them access to more foreign capital and blended finance.

Last year, at The Summit for a New Global Financial Pact in Paris, we lobbied strongly for partnerships that help emerging market economies access and share credit scores. African Development Finance Institutions (DFIs) actually do have the capacity to assist in providing guarantees to attract foreign capital. But they need to ensure that capital is drawn for adaptation or resilience projects that also have economic development co-benefits.

To what extent have climate finance policies been effective at attracting investments and improving development outcomes in Africa?

Several countries have embraced carbon markets as a way of helping them individually fundraise with nature-based adaptation and resilience projects. In Africa, 13 nations have joined the High Ambition Coalition (HAC), a group of countries committed to pushing for ambitious goals in international climate negotiations who want to show themselves to be part of the net-zero solution. But this has still not attracted partners to the extent anticipated.

It is estimated that around 30% of the whole planet’s natural sequestration of carbon takes place on the continent due to Africa’s vast and diverse ecosystems, including large forests, grasslands, peatlands, and wetlands. In addition, the continent is home to about 30% of the world’s mineral resources critical for the global transition to renewable energy and low-carbon technologies, such as cobalt, platinum, and manganese. Capital will be drawn to those governments that can implement effective green industrialisation policies. However, investments to the continent—at currently only 2.4% of global FDI—are not commensurate with its global mineral endowments and carbon sink potential.

Furthermore, technically, the continent’s play in public markets should be well beyond the current 3% that it has been able to raise in the voluntary carbon markets. Africa’s contribution is being underpriced and is essentially subsidising the rest of the world’s climate action. In the voluntary carbon markets, the price is currently around US$ 10. But if you look at the price in the compliance markets (such as the cap and trade EU Emissions Trading System), some of these markets are trading at around US$ 112. It is very concerning that nine times more capital is still flowing into Africa’s “dirtier” sectors, such as oil and gas, than into more “green” sectors.

In your view, how is soaring sovereign debt impacting nations in Africa and their efforts to manage their finances in a sustainable manner?

More than half the countries in Africa currently spend more on debt repayments than on health care. Debt is unsustainable for 30 of these Least Developed Countries (LDCs) on the continent. How they manage this debt is not just a problem of liquidity: it is compounded by systemic issues that have their roots in history and the global financial infrastructure. What makes this debt burden even more unsustainable is that, according to the latest Global Climate Risk Index, nine of the ten countries most impacted by climate change are in Africa.

We are increasingly seeing that African governments are taking on more debt in response to critical adaptation and resilience issues. So the New Collective Quantified Goal on climate finance, mentioned earlier, should not be setting targets without also tackling the issue of debt. We should be thinking about our responsibilities and the historical pressures that have been put on many developing countries to take on debt to finance their climate change response. Mechanisms including debt relief for adaptation and climate debt swaps are potential solutions under the new goals.^2,3

One of the good things to come out of COP27 in Egypt was the formation of the Sustainable Debt Coalition (SDC)⁴. This collaborative initiative addresses issues at the intersection of sovereign debt, climate change, and development. The coalition was created to foster a cooperative environment for countries to discuss and implement strategies that enhance the financing of sustainable development initiatives. It focuses on reforming the international debt architecture to better handle the challenges posed by climate change and to support the achievement of the Sustainable Development Goals (SDGs).

We are seeing some progress. Over the past year, the World Bank has made significant strides in its guarantee programmes, particularly in the context of managing sustainable debt. And in February 2024, the African Union launched the Alliance of African Multilateral Financial Institutions, or Africa Club, which the continent’s leaders hope will be a vehicle to push for global financial architecture reforms.

Some African countries are already reaping the benefits of recent reforms that help mobilise climate finance. Kenya is one such example with its Green Bond Programme, which attracts investment into environmentally sustainable projects. Gabon has also launched a groundbreaking financial instrument known as a Blue Bond. These are distinct from traditional green bonds and focus specifically on ocean conservation. Gabon’s Blue Bond involved refinancing US$ 500m of the country’s sovereign debt and will allocate US$ 125m to support ocean conservation efforts.

But climate shocks are only increasing and LDCs are having to divert funds from elsewhere. This is exacerbated by how slow multilateral organisations are to disburse grants. It takes at least eight months to apply for funds from the UN’s Green Climate Fund (GCF), the world’s largest dedicated climate fund. Such inefficiencies in these systems means countries are unable to effectively respond to crises, which can be life or death situations for some communities, let alone the attendant economic losses.

Botswana looks on course to achieve its goal of reaching high-income status by 2036. What might other African nations learn from Botswana’s approach to governance and macroeconomic management?

Botswana has significant mineral reserves and in particular diamonds. After independence, the Botswana government negotiated those initial agreements with the De Beers mining company with the clear intention that every diamond found should translate into improved social services, stronger national reserves, and greater national development. Such natural resources should not be fully managed commercially. Gaositwe Chiepe was one prominent Botswana politician and diplomat who led these efforts. Hers is a story of brilliant leadership and foresight. As Minister of Trade and Industry, and later of Mines and Natural Resources, she was pivotal in developing Botswana’s equitable mineral resources policies.

Today, Botswana upholds careful management practices around the mines with thorough economic and ecological assessments for every project. This extends to how mining land will be used and rehabilitated after a mine is retired. Botswana is also home to the largest inland delta in the world, the Okavango Delta, which is renowned for its extraordinary biodiversity and is a major destination for ecotourism: this is another natural resource that must be protected.

Botswana is well regarded for efforts to promote gender equality: ensuring women have equal access to education and jobs and can rise to senior, better paying roles. How does women’s empowerment impact economic development in Africa?

Botswana has taken a very deliberate and consistent approach to instituting and revising legislation that can positively impact women’s economic participation. This of course begins with access to education. But it even extends to programmes that support bringing teenage girls back into school after pregnancy. And once women enter the workplace, their participation is high: at 57% in the private sector, a little higher than men. Additionally, ever since reforms were made to property rights, 70% of households in Botswana are now headed by women.

The women’s empowerment and advocacy movement in Botswana has been cultivated from a grassroots base for decades, exemplified by women’s rights organisations such as Emang Basadi (which translates to “stand up, women” in Setswana). During my time in parliament there was always a consensus on instating laws that empower women. What I observed was that personal safety for women is essential—for women to feel safe at work, at home, and in their communities. Safety is a basic human right, but it also leads to economic opportunity. When people are safe, they have more equal access to labour, capital, and employment, which really unlocks tremendous resources and capacity in society.

But there are still significant issues facing women in Botswana, and across the continent. Femicide, or gender-based violence resulting in the death of women, has been a significant concern. Recognising this issue, the Botswanan government has been working on strengthening the legal framework and enforcement measures to protect women from violence. This includes revising laws related to sexual and domestic violence, to increase protections for women and ensure harsher penalties for perpetrators.

But cultural norms are still lagging the law. A survey has shown that more men feel threatened and disempowered if women are perceived to be gaining more economic independence. So, governments also need to communicate better that economic growth is not a simple zero-sum game and that they are growing the pie for everyone.

In your view, what should countries seeking to govern well in the next decade pay most attention to today?

This is a difficult question because I have personal passions and I have professional passions. My personal passion is promoting the importance of women’s economic agency. My professional passion is the broader democratisation of economic opportunity. This means making systemic changes and reforms that allow individuals more access to personal finance and to start a business. If people cannot do that without calling on their personal connections, then we are failing.

Africa moved forward in the 20th century with a political revolution that democratised the continent. But on the economic front, the informal sector across Africa is still too high, and the market is not self-correcting as it is supposed to. This is hindering concerted indigenous economic development, which we have seen lifting economies elsewhere, such as in Asia. Africa is ripe for an economic revolution. Our job is to make it happen.