Conflict-ravaged countries pushed into debt traps by climate funding

55 percent of funding provided to fragile and conflict-affected states in Africa came in the form of loans and other forms of debt.

Global climate finance levels are woefully insufficient to keep warming below 1.5°C or protect people from the devastating impacts of climate breakdown —and this gap is particularly evident in countries mired in conflict or that are unable to provide basic services for their communities. 

In a brief published today, “Forgotten Frontlines: Looking at the climate finance going to fragile and conflict affected states in 2019-20,” Oxfam shows that the share of total climate finance provided to fragile and conflict-affected states (FCAS) between 2019 and 2020 was on average $13.64 per person per year. This number drops even lower —to $6.68 per person per year— in countries facing active conflict, leaving conflict-ravaged communities exposed to deadly climate breakdown.

Oxfam’s research also finds that 55 percent of funding provided to FCAS in Africa came in the form of loans and other forms of debt financing that will sink fragile states further into debt. Nigeria received the highest share of debt-creating climate financing (95 percent), followed by Cameroon (87 percent) and Burkina Faso (57 percent). In 2022, 13 out of the 20 African FCAS (65 percent) featured in the study were either at high risk of debt distress or were in debt distress.

‘‘Many African countries are in serious debt trouble —entire countries are facing bankruptcy. And now, to deal with the devastating effects of a climate crisis they did not cause, they’re being forced to borrow more. Climate funding is pushing Africa further into debt traps. This is hypocritical and unsustainable. And it needs to stop. There is no climate justice without debt justice,” said Fati N’zi-Hassane, Oxfam in Africa Director.

Only 6.4 percent of global climate financing in 2019-2020 went to the 20 African FCAS included in Oxfam’s study. Each country received, on average, 0.32 percent of the total funds.

‘‘One problem is that most of the money for climate action is coming as loans. Another is that, despite climate devastation escalating across Africa, it’s too little and too slow,’’ said N’zi-Hassane.

Oxfam estimates that two billion people, a quarter of humanity, live in countries that should not be forced to borrow further due to their levels of existing debt. Making these countries take out loans could lead to further cuts in public spending, which would have devastating consequences for people already living in poverty.

Oxfam is calling for more climate funding for FCAS in the form of grants, for climate programming to better embed conflict-sensitivity in their programs, for more finance to go to local organizations, and for stronger collaboration between humanitarian, climate, and peace actors. 
 

“It’s time to shift away from old funding models which cater to the preferences of donors, and towards solutions based on the needs of affected countries and communities,” said Safa Jayoussi, Oxfam’s Climate Justice Advisor for the Middle East and North Africa. “We need a new era of climate financing, one that empowers local voices with grant-based finance and ensures sustainable, long-lasting change.”

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