Africa’s agricultural sector stands at the frontline of climate change impacts, as the continent’s largely small-scale farmers face rising temperatures, shifting rainfall patterns, and increasingly frequent extreme weather events. Given that agriculture employs nearly 60% of Africa’s workforce and is a key contributor to GDP, this sector’s vulnerability has profound implications for economic stability, food security, and rural livelihoods across the continent. 

To tackle these pressing challenges, Africa urgently needs substantial investment in adaptation finance—funding dedicated to helping communities and industries build resilience against climate impacts. Unlike mitigation finance, which focuses on reducing greenhouse gas emissions, adaptation finance directly helps fund the efforts needed to cope with the impacts of climate change, from adapting farming practices to building protections against severe weather. Yet, despite the pressing need, adaptation funding in African agriculture remains critically low, placing the future of millions of livelihoods at risk without immediate, robust action.

The climate impacts on African agriculture are well-documented. The Intergovernmental Panel on Climate Change (IPCC) reports that African farmers are among the most vulnerable globally to climate change, with yields projected to decline by up to 50% by 2050 in some regions without effective adaptation measures. Despite this need, African agriculture receives only a small fraction of global adaptation finance flows. According to the Global Center on Adaptation, adaptation finance in Africa reached around $11.4 billion in 2021. Projections suggest that Africa will need to increase its adaptation funding tenfold to effectively combat the effects of climate change and enhance resilience in agriculture and other critical sectors. This discrepancy highlights the urgent need for increased funding to meet the demands of climate adaptation efforts across the continent. 

Challenges in Mobilizing Adaptation Finance for African Agriculture

Several factors have hindered the effective mobilization of adaptation finance in Africa. First, adaptation projects in agriculture are often seen as high-risk investments with uncertain returns, discouraging private sector engagement. The sector’s fragmented nature—with many smallholders dispersed across vast rural areas—also complicates the disbursement and management of adaptation funds. Additionally, a lack of data on climate impacts, crop performance, and farm-level risks makes it difficult to design targeted financial products. This lack of reliable data can reduce investor confidence and limit the availability of finance.

Strategies for Scaling Up Adaptation Finance

• Developing Climate-Smart Financial Products
  Climate-smart financial products, such as index-based insurance and blended finance models, can help de-risk agricultural investments. Index-based insurance, for instance, allows farmers to receive pay-outs based on climate indices, such as rainfall levels, without needing on-site loss verification. The Kilimo Salama program in Kenya is an example of this. It uses weather stations to provide coverage for farmers against drought and excessive rainfall, enabling them to secure loans and invest in their farms​. Programs in countries like Ethiopia provide insurance based on livestock mortality rates linked to climate conditions, helping pastoralists manage risks related to drought.
• Leveraging Blended Finance to Attract Private Investment
  Blended finance, where concessional funds are combined with private capital, can make adaptation projects more appealing to investors by reducing their risk. The African Development Bank’s (AfDB) Adaptation Benefits Mechanism (ABM) is an innovative approach that aims to provide financial rewards for verified adaptation outcomes, incentivizing private investors. Through this model, private sector funds supplement public finance, supporting resilience-building projects that would otherwise be unviable.
• Enhancing Access to Carbon Markets
  Accessing international carbon markets represents an untapped opportunity for African agriculture. Many adaptation strategies, such as agroforestry and improved soil management, also contribute to carbon sequestration, making them eligible for carbon credits. Rwanda’s Nyungwe Forest Project, which incentivizes sustainable land management practices, has generated carbon credits that fund local community development and adaptation efforts. By scaling such projects, African countries can finance adaptation while contributing to global climate goals.
• Establishing Adaptation-Focused Public-Private Partnerships
  Public-private partnerships (PPPs) can bridge the gap between public funding shortages and private sector expertise. By aligning public resources with private sector efficiency, PPPs can accelerate the implementation of adaptation projects. Ghana’s Climate Innovation Center is a noteworthy example, where a partnership between the Ghanaian government and private entities provides financing, training, and support to agribusinesses adopting climate-resilient practices. Such PPPs not only bring in funding but also foster innovation in adaptation strategies.

Recommendations for Scaling Up Adaptation Finance

To effectively scale up adaptation finance, African governments and international donors should adopt multiple strategies. Key recommendations include:

• Strengthening Domestic Financial Institutions: National financial institutions should be equipped with tools and expertise to handle adaptation finance, ensuring funds reach rural areas effectively.
• Improving Data Collection and Risk Assessment: Investment in climate data infrastructure, including early warning systems and soil monitoring, can help generate the data necessary for designing better-targeted financial products.
• Increasing International Funding Commitments: International climate finance bodies must prioritize African agriculture in their adaptation finance strategies, ensuring that sufficient funds flow to areas with the greatest vulnerability.
• Mobilize Private Sector Investment in Adaptation: Create incentives, such as tax breaks or guarantees, and develop public-private partnerships (PPPs) for climate adaptation projects to attract private investment, build resilience, and reduce risks for investors while meeting public adaptation needs.

Conclusion

The urgency of scaling up adaptation finance for African agriculture cannot be overstated. With climate change threatening food security and economic stability, mobilizing resources to support adaptation is essential. While challenges remain, innovative finance models, capacity building, and international cooperation provide a promising pathway forward. By enhancing resilience in agriculture, Africa can protect its rural communities, sustain its economic base, and contribute to global efforts in climate adaptation and sustainability.