From where we sit in Africa, Europe has long led the global sustainable investment agenda, but we may be witnessing some cracks. In Q2 2025, Europe recorded net negative outflowsin green funds for the first time. After peaking at $645 billion in 2021, flows into sustainable funds appear to decline steadily.
The global political context adds further uncertainty, as America’s stance has weakened confidence in ESG-aligned strategies. Recently, I read about ExxonMobil overtaking European rivals in low-carbon spending, and I thought about how Africa remains on the margins—another reminder of the nagging thought that Africa cannot depend on European capital cycles to fund its green transition.
Financing Africa’s low-carbon transition
Africa is estimated to need $418 billion by 2030 to finance its low-carbon development. However, it is argued that economic structures rooted in traditional GDP metrics undervalue Africa’s natural and mineral wealth. African leaders pushed to change this at the 2025 IMF and World Bank Spring Meetings, calling for a shift in Africa’s financial narrative:
- An upgrade of national risk profiles
- Building capacity for green investment
- Prioritising climate-resilient infrastructure
So, how do we reframe Africa’s ecological value?
The joint African initiative, which advocates natural capital accounting, which economically values ecosystems like forests, wetlands, and mineral reserves, takes an approach that could strengthen Africa’s position in climate negotiations and unlock financing tied to its ecological assets.
There is potential for carbon pricing to unlock climate finance if models can also be tailored to Africa’s realities. Recommendations in this regard include:
- Ensuring social acceptance: Public trust depends on fairness and transparency
- Reinvest revenues: As seen in South Africa, carbon taxes can expand access to clean energy.
- Start small: phased models allow for gradual economic adaptation.
- Leverage public-private partnerships to scale green innovation.
- Use of nature-based solutions like forests and peatlands to generate carbon credits.
- Seek international support from agencies like UNEP for technical assistance.
- Build a pan-African carbon market via AfCFTA to attract investment and streamline standards.
Final thoughts
Africa must lead its green wealth revolution. This can be possible through innovative policies, carbon innovation, and changing the narrative rooted in its ecological strength.
Climate justice begins with how Africa values Africa’s green wealth.
