The East African coastal forests, ranked among the top-ten most threatened biodiversity hotspots in the world, are particularly vulnerable.
The effects of climate change are already apparent on the continent and are expected to worsen significantly in the coming decades. The rainforests of the Congo recently overtook the Amazon as the world's most significant carbon sink. This removal of carbon from the atmosphere is valued at US$55 billion per year. However, deforestation is progressing at a prodigious rate from the Congo Basin, across West Africa, diminishing the continent's ability to provide such essential ecosystem services.
Although nature-related risks and the need to protect biodiverse ecosystems are continent-wide, the priorities and solutions to fund biodiversity protection solutions differ from country to country. Following the 2022 Conference of the Parties to the UN Convention on Biological Diversity (COP 15), the participating nations agreed upon the Global Biodiversity Framework. Its main goal—known as "30 by 30"—is to "ensure and enable that by 2030, at least 30 percent of terrestrial, inland water, and coastal and marine areas, especially areas of particular importance for biodiversity and ecosystem functions and services, are effectively conserved and managed."
African governments have been taking steps to conserve biodiversity in recent decades, aiming to slow the rate of ecosystem deterioration and species loss. However, these efforts have fallen short of the 30 by 30 goal agreed upon in the Global Biodiversity Framework. Several factors, including country-specific development priorities and global conflicts, along with the high cost of borrowing and various in-country physical and social risks, are causing major constraints for access to funding.
According to the Organization for Economic Co-operation and Development (OECD), the decline of biodiversity is generating "significant but largely overlooked risks to the economy, the financial sector and the well-being of current and future generations." Mobilizing private finance for biodiversity and natural resources management is not a new concept, but the urgency of conservation needs and the broad scope of related issues have refocused funding efforts on two critical areas: understanding the biodiversity impacts of finance and vice versa, and the need for multiple stakeholders to participate at various levels in order to achieve a shared objective.
Numerous statistics and predictions abound on the scale and cost of addressing and implementing solutions for biodiversity protection. According to the Global Environment Fund, "preserving healthy terrestrial and marine ecosystems, and the clean air, fresh water and biodiversity on which we all depend, has a financial cost of US$300 billion to US$400 billion every year." To effectively manage Africa's 1,812 national parks, covering 3.1 million square kilometers, an estimated annual funding of approximately US$10.2 billion is required, along with an extra US$1 to US$2 billion annually for protected areas that are home to lions. Currently, only 19 percent of Africa's land and 17 percent of the seas around the continent are protected in one form or another. An estimated annual funding of approximately US$20 billion to US$25 billion is needed to align with the 30 by 30 objective.
Causal links between biodiversity preservation in Africa and environmental, social and governance (ESG) risk mitigation in developed markets need to be clear and visible in order for impactful funding to become a reality. If these links can be compellingly demonstrated, a range of options exist for developed and African nations to collaborate in protecting African biodiversity initiatives. These include funding sourced from public and private sectors, and a range of intermediaries. Public intermediaries include government ministries, development finance institutions (DFIs), whether national, bilateral or multilateral, and multilateral and other funds whose mandates include preservation of biodiversity, such as the Global Environment Facility (GEF).
Private sector intermediaries—institutional investors, asset managers, commercial banks, philanthropic organizations and direct private sector investors into biodiversity protection projects—are also part of the equation. Looking at the scale of resources for funding real and measurable results casts a positive light on the opportunities that biodiversity protection presents. For instance, in areas such as mining, infrastructure development and agriculture in terms of minimizing harm is included among the measures to manage a project's overall environmental impact.
A Guest Editorial