Climate finance across sub-Saharan Africa: Decision trees and network flows

Abstract

The structure of climate finance flows from donors (multilateral sources) to recipients (sub-Saharan African countries) was studied. This is the first study to provide a comprehensive network structure of the climate finance flows into Africa, based on the global public climate finance governance system. Network theory and decision tree techniques were employed. The results obtained generally fit the multilateral funding units (MFUs) into two categories: central funding units (CFUs), which simultaneously attend to the climate-related projects of many African countries, and the boundary funding units (BFUs), which cater to only a few countries at once. An isolated region with no BFUs was identified. African countries within this group could be more exposed to climate financial risk as they rely on only the CFUs. In general, with the exception of mitigation REDD (reducing emissions from deforestation and forest degradation) climate finance, a disproportionate distribution of climate themes, with particular reference to adaptation finance, was observed across sub-Saharan Africa. This has real implications for equitable resource allocation of climate funds. The need for African-bred region-wide MFUs is recommended.

Significance:

Insights from this analysis expose the presence of contagion effects within the sub-Saharan African climate finance network structure and, consequently, the flow of climate finance-related risks. This knowledge is critical for future planning as it can provide African governments and interested stakeholders with informed evidence upon which they can make reliable and justifiable decisions, such as shaping of sectoral strategies and improving of climate finance flow coordination.