Zimbabwe is under increasing financial pressure as it implements reforms aimed at restructuring its $21 billion debt to international creditors, according to African Development Bank President Akinwumi Adesina. As of December 2023, the Reserve Bank of Zimbabwe has transferred $3.66 billion of external debt to the Treasury.
Zimbabwe plans to pay $331 million to 439 former white farmers whose land was seized in 2000, as part of efforts to restructure its significant debt. This move aims to facilitate negotiations with creditors, allowing the nation to access international capital markets after being locked out for over two decades.
The Green Climate Fund has approved over $100 million to support Somalia"s farmers facing droughts, floods, and conflict, marking a significant step in addressing climate finance in conflict-affected regions. This funding highlights the urgent need for increased investment in fragile countries, where the risks of inaction are profound. Despite the challenges, including a historical reluctance from private investors, efforts are underway to enhance financial management and attract more funding to these vulnerable areas.
Humanitarian agencies face challenges in addressing climate adaptation in conflict-affected regions like Somalia, where immediate aid has not reduced long-term needs. Experts emphasize the importance of collaboration between humanitarian and development sectors to build resilient systems and address underlying vulnerabilities, while also urging countries to improve governance and reduce corruption to attract more funding.
Ivory Coast is launching a $500 million green-financing facility aimed at combating climate change, supported by the African Development Bank and the Climate Investment Funds. This initiative is part of the country's strategy to reduce greenhouse gas emissions by one third by 2030 while enhancing climate resilience.
Rich countries are on track to double climate adaptation funding to developing nations by 2025, increasing from $22 billion in 2021 to around $28 billion in 2022. However, this still falls short of the estimated $215 billion-$387 billion needed annually, with concerns over the predominance of loans over grants exacerbating the debt burden on vulnerable nations. As discussions continue ahead of COP29, developing countries are advocating for a clear target for adaptation funding to address their urgent needs.
Ghana's Cocoa Management System (CMS) aims to enhance cocoa traceability and comply with EU deforestation regulations, having already registered 793,000 farmers and mapped 1.2 million hectares. A proposed one-year delay in the EU's deforestation regulation implementation could provide Ghana additional time to finalize the CMS and improve logistics. This extension is also crucial for Tanzania, where coffee farmer registration is just beginning.
The European Central Bank (ECB) has blocked efforts by the African Development Bank (AfDB) and Inter-American Development Bank (IDB) to secure special drawing rights (SDRs) from Eurozone nations for climate finance, citing legal incompatibilities. Despite support from France and Italy, Germany opposes reallocating SDRs, which the ECB views as a risk to financial stability. Economists suggest that direct allocation of SDRs to multilateral development banks could be a solution, but achieving the necessary consensus within the IMF remains challenging.
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