Daud Olatunji
Development Finance Institutions (DFIs) from across Africa have sounded a dire warning about the economic repercussions of climate change, urging immediate and strategic action to combat the looming crisis.
Under the banner of the Association of African Development Finance Institutions (AADFI), these financial institutions have called for practical plans to integrate climate-resilient practices into African businesses.
Failure to do so could result in a loss of 5% to 15% of Africa’s projected GDP by 2050, according to AADFI.
The sobering revelation was made during the Joint International CEO Forum, hosted by the Bank of Industry in Abuja, which saw bank CEOs from 33 countries spanning four continents in attendance. The event’s theme, “DFIs’ Strategic Role towards a Climate Smart Future,” emphasized the critical role that Development Finance Institutions must play in addressing climate change challenges.
AADFI Chairman, Mr. Thabo Thamane, delivered a keynote address in which he highlighted the severe consequences awaiting the least developed countries, particularly those in Africa, Asia-Pacific, and Latin America, if swift action is not taken.
Thamane painted a bleak picture, stating, “It is no longer news that the world is facing the negative impact of climate change.
Human health and safety, food and water security, and sustainable socio-economic development are threatened globally.”
The economic ramifications of inaction are staggering, with reports indicating that the global economy could lose over 18% of its current GDP by 2048 if steps are not taken to combat climate change. Africa, specifically, is at risk of losing 5% to 15% of its projected GDP by 2050, with an estimated annual climate adaptation cost of $10 to $30 billion by 2030.
Meanwhile, Asia and ASEAN countries could see even greater losses, with projections of 26.5% and 37.4% of their GDP at risk by 2048 without immediate mitigation efforts.
The call for action by AADFI underscores the urgency of addressing climate change not only as an environmental issue but as an economic imperative.
The implications for Africa’s economic future are profound, and the time for decisive measures to build climate resilience into business models is
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