Africa demands NCQG of $1.3 trillion per year for developing countries

The African ministerial climate talks concluded in first week of September, emphasising the need for a “finance COP”, global finance reforms and strengthening adaptation efforts

At the 10th Special Session of the African Ministerial Conference on the Environment (AMCEN) in Abidjan, Côte d’Ivoire last week, African leaders declared that a New Collective Quantified Goal (NCQG) on climate finance should be adopted, one that would require rich nations to mobilise a quantum of no less than $1.3 trillion per year for developing nations.

Finance stayed at the heart of the discussions at AMCEN. The Abidjan meeting pushed for more climate finance flows to Africa through sustainable channels that won’t load African economies with more debts. The end goal is now to strengthen the continent’s adaptation and mitigation defence systems against climate change and allow the countries to achieve a just transition. 

The African Group of Negotiators (AGN) will present the consolidated views from AMCEN in the upcoming  COP29 in Baku, Azerbaijan. 

“As we head to COP29, the Africa group is prioritising the need for ambitious climate finance outcomes. Our position includes; an NCQG of  $1.3 trillion per annum by 2030; quality of finance that is informed by criteria including debt sustainability, cost of borrowing, and significantly from public sources, thus emphasising grant and highly concessional finance; and transparent mechanisms in respect of accountability,” said Ali Mohamed, chair of the African Group of Negotiators on Climate Change (AGN).

“Finance COP”

NCQG is supposed to be at the top of agenda at COP29 in Baku. NCQG is a new financial target from the year 2025 onwards that developed countries, who are the biggest contributors to climate change, must avail to developing countries, replacing the previous commitment of $100 billion per year that they pledged in 2009 but failed to deliver on time.

The Least Developed Countries (LDCs), under the Lilongwe Declaration on Climate Change 2024, said that the new climate finance goal to be science-based and reflective of the developing countries’ actual climate needs through increased public finance, predominantly delivered as grants. The LDC Ministers put the finance needed  by their countries to implement their current climate goals to be at least $1 trillion. Also, they said that only concessional finance should be included as climate finance and must be easily accessible.

“We want COP29 to deliver a bold commitment to address climate change. The LDCs are calling for an ambitious New Collective Quantified Goal (NCQG) on climate finance that reflects the actual financial needs of developing countries, ensuring they can implement their NDCs, adapt to climate impacts, and address loss and damage,” said Evans Njewa, chair of the LDC group. 

Grants and concessional finance are crucial, in particular for adaptation and loss and damage, given that it is the rich nations that have historically caused the unsustainable build-up of greenhouse gases in the atmosphere, stoking global warming to dangerous levels.

AMCEN Ministers said that COP29 should be responsive to the evolving needs of the respective countries’ climate action plans, including their Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs), while reflecting the global stocktake outcomes and latest scientific and technological advancements.

To avoid missteps associated with previous pledges, the AMCEN and the LDC Ministers are calling for the new finance goal to contain predictable, time-bound and reliable financial commitments from each of the developed countries.

Both groups clarified that the new finance goal must be delivered by developed countries jointly, in a fair and equitable manner. They signalled the importance of burden-sharing arrangements among these countries to increase scale of finance and ascertain delivery of commitments. 

Need for global finance reforms

The severe debt problems that developing nations face are made worse by the growing effects of climate change. Both sets of ministers are requesting that multilateral development banks (MDBs) and international financial institutions (IFIs) change the way they fund less developed countries. The declaration said that these institutions ought to pay more attention to the requirements of Africa, reevaluate their financing arrangements, and be more receptive to debt relief and restructuring when necessary in order to unlock funding for development and the environment without driving these nations farther into unmanageable debt.

The Ministers reaffirmed that grants rather than loans should be used to provide climate finance.

Time to activate loss and damage fund

The Loss and Damage Fund, as well as the Santiago Network, which links vulnerable nations with international suppliers of the technical support, expertise, and resources required to mitigate climate risks, should be operationalised and capitalised immediately, according to AMCEN and LDC Ministers. The LDC ministers specifically requested that the L&D fund be established with mechanisms that facilitate quick, easy, and direct budget support to governments via national treasuries and finance ministries, in addition to allowing direct access for both national and subnational entities. The African Ministers called for the reconsideration of the decision to host the Santiago Network in Geneva rather than Nairobi. The LDC Ministers also advocated that the NCQG include a sub-goal on loss and damage.

Strengthen adaptation efforts 

The Ministers asked for Global Goal on Adaptation (GGA) to be fully operationalised and ensure adequate adaptation response to protect people, livelihoods and ecosystems from natural disasters, with a special focus on finance, capacity building and technology transfer. The amount of adaptation finance needed is about $360 billion annually, compared to about $18 billion that was available in 2019.

COP29, according to AMCEN leaders, should send the right policy signals on operationalising common but differentiated responsibilities and respective capabilities (CBDR&RC), which acknowledges the different abilities and share of responsibilities of each country in addressing climate change. 

Additionally, the just transition framework should reflect the priorities of Africa, in particular green industrialisation, sustainable use and value addition of natural resources, as well as addressing energy poverty and clean cooking needs.

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