Africa has taken a historic leap toward aligning its financial systems with global climate and sustainability goals with the official validation of the first-ever Africa Sustainable Finance Taxonomy. This groundbreaking framework, endorsed by regulators, banks, insurers, and development finance institutions, was launched in Nairobi on July 16–17 under the leadership of the African Development Bank through its African Financial Alliance on Climate Change (AFAC) platform.
Developed through a year-long consultative process involving over 60 financial and real sector institutions, the taxonomy sets standardized definitions for sustainable economic activities. It is designed to help financial institutions channel capital toward climate-smart and socially responsible investments, closing a critical gap in Africa’s financial architecture. The lack of standardized sustainable finance tools, first identified in a 2021 sector-wide survey, had long been a barrier to mobilizing domestic green capital.
The framework aims to harmonize African financial markets and attract green investment.
Driving regional integration and attracting green capital
Technical support for the taxonomy came from PricewaterhouseCoopers Luxembourg, with funding from the Global Center on Adaptation under the Africa Adaptation Acceleration Program. Stakeholders from across the continent praised the initiative as a transparent, Africa-focused framework that aligns with global standards while reflecting local development priorities.
Bank of Ghana’s Nana Sika Ahiabor highlighted the taxonomy’s potential to scale up green finance, while Mahamadi Balima of the West African Monetary Union emphasized its role in standardizing financial products and fostering inclusive growth. BRITAM Kenya’s Ann Njuguna described the process as rewarding, noting the importance of real-world case studies in ensuring practical application.
Strengthening Africa’s climate finance architecture
The African Development Bank sees the taxonomy as a cornerstone of its Climate Change and Green Growth agenda. Prof. Anthony Nyong called it a “critical milestone” in mobilizing private sector resources for sustainable development. Ahmed Attout, Director of Financial Sector Development, said its creation reflects a strong commitment to helping Africa’s financial sector manage sustainability risks and seize green investment opportunities.
As climate and sustainability challenges intensify, the Africa Sustainable Finance Taxonomy aims to harmonize financial markets, attract international impact investors, and reinforce economic resilience—building a financial ecosystem rooted in Africa’s priorities yet globally connected.
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