Africa has lost up to 5% of GDP to climate crisis

According to the State of the Climate in Africa 2023 report, published this month, the world’s most economically challenged continent is losing out significantly due to the environmental emergency.

The analysis has found that in sub-Saharan Africa, adaptation measures to try and mitigate the impact of the climate crisis are now costing between $30 and $50billion annually. 

Many African countries are now diverting up to 9% of their budgets to environmental projects, and on average state are losing between 2 and 5% of their total GDP. This figure will increase significantly over the coming years. 

‘Some suggest that we cannot afford the green transition to net zero,’ said Christian Hernandez Gallardo, partner and co-founder of climate-tech VC 2150. ‘They are right in that it will be a massive undertaking and will require unprecedented investor action, but let’s be clear about what the alternative is.

“Costs will continue to grow, while commercial opportunities will be lost to rising sea levels, lost and displaced human capital, and days too hot to work,’ he continued. ‘This world is not inevitable; the technological solutions exist to mitigate, adapt, and resist the worst elements of the climate crisis.’

Worryingly, the assessment comes at a tome wen PwC has reported that investment in sustainability and decarbonisation is rapidly dropping, with a fall of 40% in 2023 alone, although business spend has been falling across sectors and areas in general. 

However, global studies of attitudes among larger companies towards prioritising net zero are also showing worrying trends, with just 53% of firms saying ESG is high on their agenda, down from two-thirds in 2021.

‘Although money is of course tighter, with interest rates remaining high and venture capital and institutional funding becoming scarcer as financiers look to cut expenditure, we cannot allow the momentum built over the last five years to wane,’ added Hernandez Gallardo.

‘In reducing their efforts to invest in climate mitigation and resilience, all businesses are doing is deferring payment on an ever-growing bill. Furthermore, investors miss out on the myriad of commercially viable, sustainable technologies that are being developed every day by ingenious startups that need access to capital ASAP,’ he continued. ‘Let’s remember what sustainability and the S in ESG traditionally stands for; resilient, future-facing business and investor activity to protect current shareholders, stakeholders, and businesses from medium and long-term risks.’

More on climate change and net zero: 

Four UK UNESCO Heritage Sites ‘most at risk’ from climate change

Essex County Council launches free business training for net zero transition

72% of G20 citizens now support criminalising environmental damage

Image: Sergey Pesterev