Ofori-Atta urges swift support for Climate Vulnerable Countries
The Minister for Finance, Ken Ofori-Atta, who also chairs the V20 group of Finance Ministers, has called on Multilateral Development Banks (MDBs), the International Development Finance Club, and the global financial architecture to promptly provide the necessary support to Climate Vulnerable countries.
He emphasized the urgent need for swift support to achieve Climate Prosperity Plans in the face of the growing global crisis, which threatens to widen the financial gap between vulnerable and developed countries.
Speaking at a side meeting of the ongoing Conference of Parties (COP 28) in Dubai on the topic “Action for Climate Targets (ACT) for a Net-Zero Future,” a representative of the Ministry of Finance, Dr. Osei Oteng Asante, conveyed the Finance Minister’s message.
Mr Ofori-Atta disclosed that 40 of the 68 Member States of the V20 Group were in debt distress, highlighting the financial challenges faced by vulnerable countries.
The minister pointed out that climate prosperity actions developed by most V20 members were constrained by inadequate financing, high capital costs, and fiscal space constraints, especially after the COVID-19 crisis.
He stressed that vulnerable countries, in their pursuit of development, were inadvertently building further vulnerabilities with each investment instead of becoming more resilient.
Mr Ofori-Atta urged Multilateral Development Banks to incorporate climate vulnerability into their resource allocation metrics.
He emphasized the importance of ensuring that climate-vulnerable economies have access to low-cost and concessional resources. Additionally, he advocated for the scaling up of credit enhancement tools and guarantees for vulnerable countries and the dedication of resources directly to project preparation facilities rooted in member countries’ climate prosperity plans.
The Finance Minister called for swift action, stating that by the World Bank and International Monetary Fund (IMF) Spring Meetings in 2024, MDB management should formulate plans for a general capital increase, outlining how the increase in capital will support development-positive climate action.
In 2022, MDBs provided $60.9 billion of climate finance for low-income and middle-income economies.
Mr Ofori-Atta commended the support but called for a rapid process in releasing financial support to these countries, emphasizing the urgency in the fight against climate change.
The Climate Prosperity Plans are national investment strategies that aim to maximize socio-economic outcomes for countries on the frontline of the climate emergency.
These plans involve deploying domestic renewable energy potential and climate-proofing the economy.
