Africa is steadily laying the groundwork for a stronger, more integrated carbon market, as the African Development Bank (AfDB) prepares to launch the Africa Carbon Support Facility. Designed to help unlock climate finance and enhance sustainable development across the continent, the initiative reflects Africa’s growing leadership in aligning environmental stewardship with economic opportunity.
Confronting Climate Realities with Market Solutions
Africa continues to face significant climate-related challenges—from prolonged droughts in the Horn of Africa to tropical storms along the southern and eastern coasts. These impacts are disproportionately severe, despite the continent’s minimal contribution to global greenhouse gas emissions. As African nations work to build resilience, innovative financial mechanisms such as carbon markets offer a promising path forward.
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Access to climate finance, however, remains limited. Africa currently receives around 1% of global annual climate funding, a figure that falls far short of what’s needed to address widespread environmental and socioeconomic vulnerabilities. Bridging this finance gap is essential to expanding green infrastructure, restoring ecosystems, and supporting community-led adaptation efforts.
Structuring a Market for Growth
The Africa Carbon Support Facility, currently under development, is structured around two core pillars. First, it will assist governments in crafting and implementing the policies and regulatory frameworks required to support transparent, credible carbon trading systems. These legal foundations are crucial for attracting investors and ensuring long-term market integrity.
Second, the initiative focuses on scaling market infrastructure and activity. This includes building the mechanisms for generating, verifying, and trading carbon credits—many of which stem from projects in reforestation, clean energy, and regenerative agriculture. A key goal is to eventually enable these credits to be listed and traded on African stock exchanges, helping to increase visibility, liquidity, and pricing power.
“Through this, we envision a future where carbon credits can become a tradable commodity on Africa’s stock exchanges,” noted Anthony Nyong, AfDB’s Director for Climate Change and Green Growth.
Elevating Africa’s Carbon Credit Potential
African carbon credits are largely traded on voluntary markets today, where prices remain relatively low. Most credits originate from forestry, land use, and agriculture. By integrating these into compliance carbon markets—where pricing is governed by regulatory obligations—Africa could see a substantial increase in revenue for its emission-reduction projects. Compliance markets often value credits up to ten times higher than voluntary ones.
This evolution also opens the door to increased international investment. Countries and corporations seeking to meet climate targets frequently purchase offsets generated in developing regions. Africa’s vast forests, fertile lands, and renewable energy resources position it as a key player in supplying high-integrity carbon credits to the global market.
Aligning with Continental and Global Goals
The Africa Carbon Support Facility builds on existing regional momentum, including the African Carbon Market Initiative (ACMI), launched at COP27. With support from countries such as Kenya, Nigeria, Gabon, Malawi, and Togo, the ACMI aims to generate 300 million carbon credits annually by 2030 and scale up to 1.5 billion per year by 2050.
This effort underscores a shared continental vision: to turn Africa’s natural assets into sustainable economic value while contributing meaningfully to global climate goals.
“Carbon market development is an imperative for the continent,” said Kevin Kariuki, AfDB Vice President for Power, Energy, Climate Change, and Green Growth. “It presents an opportunity to strengthen resilience, drive investment, and build a climate-smart economy.”
Enabling Sustainable and Inclusive Growth
Beyond environmental benefits, the Africa Carbon Support Facility represents a step toward broader climate justice. By building the tools and systems to fully participate in global carbon markets, African countries can access greater financial flows, create green jobs, and support local communities through nature-based solutions.
As design efforts continue, the initiative is poised to become a model for how emerging economies can align sustainable development with climate action. It demonstrates how regional leadership, strategic investment, and innovative policy can converge to address one of the greatest challenges of our time.
Africa’s progress in shaping a credible, competitive carbon market marks a turning point in the continent’s climate finance journey. The Africa Carbon Support Facility is not just a technical program—it’s part of a broader vision for a resilient, low-carbon future that places African countries at the centre of global environmental innovation.
