The International Capital Market Association (ICMA), which sets the rules in the bond market, has proposed plans for countries hit by natural disasters caused by climate change to automatically freeze debt payments.
The introduction of new 'climate resilient debt clauses,' or CDRCs, aims specifically at low-income countries affected by disasters such as drought, flooding, and hurricanes.
Governments in such countries can use sovereign bonds to raise funds on global capital markets.
The mechanism will allow African countries on the verge or in the throes of a debt crisis to pause debt payments for a maximum of two years in order to free up cash flow to combat climate disasters.
Mr Samaila Zubaru, President and Chief Executive of Africa Finance Corporation, stated on Wednesday, November 9, 2022, that adaptation must be a priority for the continent, but it puts additional strain on Africa's current infrastructure needs.
He said, there is a great need in Africa and that, the infrastructure deficit is estimated to be $2.3 trillion.
"If you factor in the need to climate-proof and build resilient infrastructure, it becomes about $3 trillion.”
On the same day that many African delegates sought opportunities to make their cases heard, a group of over 85 African insurers unveiled the African Climate Risk Facility (ACRF) to assist the continent's most vulnerable communities in climate-proofing.
The commitment will protect 1.4 billion people from floods, droughts, and tropical cyclones by providing $14 billion in climate risk insurance to African sovereigns, cities, aid agencies, and non-governmental organizations (NGOs) through 2030.
Both measures will go a long way toward closing the continent's climate risk financing gap, as rich nations continue to dismiss demands for compensation for countries suffering "loss or damage" as a result of global warming.
Experts believe that if African borrowers can use the newly introduced CDRCs to avoid sovereign defaults while dealing with the aftermath of their latest natural disaster, it will benefit not only affected populations but also their global creditors.
On November 14, a panel of speakers from the private, public, and civil society sectors will discuss solutions to commodity-driven deforestation and highlight efforts to better conserve and restore forests while improving farmer livelihoods.
They will also discuss current initiatives, such as the Agri-Commodity Sector Roadmap, the Forest Data Partnership, US government action, and others, as well as future challenges.
Latest Stories
-
61 new architects acquire state license to practice in Ghana
14 mins -
Masloc CEO honoured as capacity building Shero of the Year
23 mins -
MPs’ Repeated Attempts to Sue the Speaker: Unintended Consequences for the 2024 Elections?
27 mins -
Today’s front pages: Tuesday, November 5, 2024
37 mins -
Galamsey: Investigation into attack on Joy News’ Erastus Asare and colleagues already growing cold
1 hour -
Mahama promises construction of stadia in all 16 regions if elected
1 hour -
Dampare has transformed Police training school – Bawumia
1 hour -
America braced as two stark visions collide on election day
2 hours -
NAPO urges Ghanaians to support NPP’s vision for national development
2 hours -
About 95% of PWDs in Obuasi have source of livelihood – MCE
2 hours -
Immigration Service intercepts 54 gallons of fuel
2 hours -
Election 2024: Roman Fada selected as flagbearer for Ghana Freedom Party
2 hours -
Bawumia to launch Ghana’s credit scoring system on Nov. 7
2 hours -
Alan to combat galamsey with strategic youth-centred business model
2 hours -
Agona Swedru chiefs commit to ending child marriage within their jurisdiction
2 hours