Kenya’s private sector have supported President William Ruto's end to unfair debt policies.
They are now calling for restructuring of the global finance architecture to scale up affordable and sustainable financing for poor countries.
This includes reviewing lending terms, revisiting capital adequacy and making finance flows consistent with low emissions and resiliency, they said in a joint declaration on Wednesday, as the Africa Climate Summit came to a close.
The call comes amid a continued debate on low funding to Africa despite the continent being the most hit by climate-related shocks including droughts, floods, storms among others.
One-third of the world's droughts occur in sub-Saharan Africa, and Ethiopia and Kenya are enduring one of the worst in at least four decades, experts said.
While adaptation to climate change remains a top priority, particularly for African and developing countries, they remain underfunded.
According to the United Nations Environment Programme, African countries require at least $3 trillion (Sh438 trillion) by 2030 to implement their Nationally Determined Contributions (NDCs).
These are countries’ self-defined national climate pledges under the Paris Agreement, detailing what they will do to help meet the global goal to pursue 1.5°C, adapt to climate impacts and ensure sufficient finance to support these efforts.
NDCs represent short to medium-term plans and are required to be updated every five years with increasingly higher ambition, based on each country’s capabilities and capacities.
“We are deeply concerned that the challenges posed by climate change, which erode long-term growth, fiscal stability, and economic welfare, disproportionately impact developing nations; particularly those within Africa, despite Africa accounting for approximately 10 per cent of global greenhouse gas emissions,” a joint declaration reads in part.
It has been made by captains of industries led by law firm-ALN, Equity Group, Commonwealth Enterprise and Investment Council, East African Business Council, Kenya Association of Manufacturers and the Kenya Private Sector Alliance.
As global tax regimes on climate change develop, African governments should ensure they establish clear and predictive regulations, policies and long-term strategies that support a just energy transition, the CEOs said.
African states should also put in place transitional mechanisms in line with common but differentiated responsibilities aligned to the Paris Agreement.
Further, they should include micro, small and medium enterprises (MSMEs) into every national strategy focused on climate action and sustainable growth, by offering accessible financial support and facilitating skill development programs to build capacity.
“Multilateral development banks (MDBs) and development financial institutions (DFIs) to speed up their alignment with the Joint MDB Paris Alignment Framework and pledge to carry out the Bridgetown Initiative,” they said.
They can do this by making investments in climate action in Africa less risky.
This could involve providing grants, concessional financing, credit, and risk guarantees to promote skill development and innovation, which will lead to enhanced improvement of private sector impact in African markets.
This will require MDBs and DFIs to transform into institutions that are more risk-agnostic, leading to increased investments in key sectors.
According to the private sector, there is also need for a review of climate finance models from project-based approaches, to long term climate investment plans aligned to growth and developmental needs.
“Concerning this, we call for enhanced support to develop climate investment readiness plans towards the realisation of a systems transition to sustainable and resilient economies,”they said in the declaration.
The sector has committed to work with African states to ensure that mechanisms are in place that channel needed funds to mitigate and adapt to climate change in Africa.
They are also keen on establishing mechanisms that scale up green investments within the private sector that include PPPs and a specific focus on MSMEs; and enhancing approaches and innovations for increasing inclusion through finance and technology, to address climate challenges in Africa.
The declaration was signed in the presence of Sanda Ojiambo, assistant Secretary-General and CEO United Nations Global Compact, Africa Business Leaders Coalition and UN Resident Coordinator, Kenya, Stephen Jackson.
The Kenyan government estimates that $62 billion (Sh9.1 trillion) was required to implement Kenya’s NDC (mitigation and adaptation actions) in 2020-2030.
The resource requirement for mitigation actions is $17.7 billion (Sh 2.6 trillion), while the resources required for adaptation actions up to 2030 is $43.9 billion (Sh6.4 trillion).