SEC DG: Africa must mobilise capital markets to close climate finance gap

Agama Emomotimi, director-general of the Securities and Exchange Commission (SEC), says bridging Africa’s climate adaptation finance gap will require regional market integration, harmonised sustainability standards, and bold mobilisation of institutional capital.

According to a statement on Sunday, Agama spoke on the role of capital markets in closing financing gaps for climate adaptation at the recent African Development Bank (AfDB) annual meetings.

He said African capital markets could be achieved through market integration, aligning standards and adopting the international sustainability standards board (ISSB) framework.

“Closing the climate adaptation financing gap in Africa is not a distant aspiration but a development imperative, and one that demands our collective ingenuity and capital,” he said.

“By integrating our markets, aligning standards, adopting the ISSB framework, and mobilising institutional capital across borders, we can build a climate-resilient future for all Africans.”

The SEC DG said Africa, which contributes less than 4 percent of global greenhouse gas emissions, bears over 25 percent of climate-related losses.

“Experts estimate our continent faces an annual climate adaptation financing shortfall of up to $100 billion by 2030,” he said.

“The 2022 Africa Economic Outlook by the AfDB estimated that the continent needs around $500 billion of climate finance by 2030.

“Africa will also need to invest more than $3 trillion in mitigation and adaptation by 2030 in order to implement its Nationally Determined Contributions.

“These figures are more than statistics, they translate into lost livelihoods in the Sahel, vanishing fish stocks in the Gulf of Guinea, and more frequent flooding in Lagos and Nairobi.”

Agama said the figures reflect a deepening divide between vulnerability and resilience.

“The stark reality is undeniable. Africa, contributing minimally to historical emissions, faces severe impacts of a changing climate which includes devastating droughts threatening food security, rising sea levels, engulfing coastlines, and intensifying storms disrupting lives and economies,” he said.

‘ISSB STANDARDS VITAL TO CLOSING CLIMATE FINANCING GAPS’

The SEC boss stressed that the ISSB standards serve as the game-changer, saying experiences in Nigeria are innovating climate finance products and also shaping global standards for sustainability disclosures.

He said adaptation finance is critically underserved due to a perception problem, data and measurement gaps, and risk aversion.

“This is where our capital markets must step in, and where the ISSB becomes vital,” he added.

To scale adaptation finance, the SEC DG called for deeper regional market integration, harmonised ESG standards, and deployment of tools like credit enhancements to de-risk early-stage climate investments.

Agama, therefore, called on regulators, governments, investors and development partners to collaborate to scale adaptation finance and deepen African capital markets.