How sustainable finance can participate in Africa’s land-based carbon sequestration 

Africa stands at a pivotal crossroads in the global struggle against climate change. The continent, though responsible for less than 10% of global greenhouse gas emissions (GHG), is home to some of the world’s most powerful carbon sinks. Collectively, these natural assets absorb or sequester over 600 million tonnes of carbon dioxide every year, more than any other forest ecosystem on earth.

Despite this net contribution, Africa accounts for just 11% of carbon offsets issued between 2016 and 2021, with a strikingly small 3% linked to the continent’s natural carbon sinks. According to Morgan Stanley, the voluntary carbon offset market is projected to expand from $2 billion in 2020 to around $100 billion in 2030.

In this context, Africa’s potential for carbon sequestration must be fully realized to manifest sustainable development outcomes across the continent.

The Sustainable Development Impact Meetings, convened by the World Economic Forum and leading climate organizations, offer a unique and urgent platform to address these challenges. These meetings can spotlight the untapped potential for sustainable finance to transform Africa’s land-based carbon sequestration landscape, particularly in the space of carbon markets.

Africa’s climate finance needs are estimated at $2.5-$2.8 trillion by 2030. These needs cut across both mitigation and adaptation; from shifting to low-carbon energy systems and conserving natural sinks, to strengthening resilience against droughts, floods and changing agricultural zones.

Yet, today’s finance flows fall far short of this mark and by 2050, there is a high possibility that one-fifth of the projected global adaptation funding gap will be in Africa, based on current trends.

Against this backdrop, a very different trend is unfolding: the countries most vulnerable to climate change are not the ones receiving the largest share of global adaptation finance.

None of the world’s 10 most climate-vulnerable countries are among the 10 largest recipients of adaptation finance. Economies such as Niger, Sudan, Liberia and Mali received only $118.01 million combined, just 5.3% of the disaggregated total, while six of the top ten most vulnerable received nothing at all.

This misalignment underscores the inequities in climate finance, where fragility and exposure do not necessarily translate into funding access.

Africa’s carbon markets are beginning to make a difference, showing momentum, rapid growth and attracting global interest. However, Africa’s participation in global carbon markets remains disproportionately low; currently, the continent captures only around 16% of the global carbon credit market.

This mismatch between potential and actual participation highlights the urgency of expanding sustainable finance mechanisms that align global investment flows with Africa’s natural strengths.

The gaps in climate finance and carbon markets are clear, but solutions are beginning to emerge. The Africa Carbon Markets Initiative (ACMI) is an ambitious step in that direction.

Backed by the United Nations Economic Commission for Africa and championed at COP27, ACMI targets an increase from 22 million tonnes of carbon credit production in 2021 to 300 million tonnes by 2030, potentially unlocking $6 billion in revenue and 30 million jobs.

Alongside ACMI, localized projects are also making a difference. The Save Wildlife project by Access Bank in Nigeria has helped communities plant over 100,000 trees, sequestering carbon while improving livelihoods.

At the national level, Gabon set a precedent in 2021 by becoming the first African country to receive payments for reducing carbon emissions under the UN-hosted Central African Forest Initiative. The $17 million disbursement supports efforts to conserve its vast rainforests, showing how international partnerships can reward effective climate action.

Africa’s carbon sequestration potential is enormous but under severe threat from deforestation and land degradation. Between 2013 and 2023 (10-year period), over 300 million tons of carbon were released in Lagos, the commercial centre of Nigeria, alone due to urbanization, agricultural expansion and wetland loss.

Yet, Africa’s forests, wetlands and mangroves remain vital carbon sinks with immense value for global climate stability, with potential to sequester over 6 billion tonnes in a 10-year period.

To fully harness this potential, Africa must build high-quality and high-integrity carbon markets, grounded in:

Beyond carbon markets, sustainable finance must scale alternatives such as green bonds to fund clean infrastructure, blended finance to de-risk private investment, and cross-border partnerships to accelerate clean fuel adoption like LPG (Liquefied Petroleum Gas).

Intergenerational foresight reminds us: Africa’s task is not only immediate financing but building systems that protect ecosystems and livelihoods for generations to come.