African leaders have regretted that the scale of financing required to unlock the continent's climate positive growth is beyond the borrowing capacity of national balance sheets.
The leaders argued, that in some cases, the borrowing is at the risk premium that Africa is currently paying for private capital.
In their declaration during the Africa Climate Summit, the leaders called for a comprehensive and systemic response to the incipient debt crisis outside of default frameworks.
This, they said, would create the fiscal space that all developing countries need to finance development and climate action.
''We note that multilateral finance reform is necessary but not sufficient to provide the scale of climate financing the world needs to achieve the 45 per cent emission reduction required to meet the Paris 2030 agreements, without which keeping global warming to 1.5 per cent will be in serious jeopardy,'' they said.
The leaders called for acceleration of the ongoing initiatives to reform the multilateral financial system and global financial architecture including the Bridgetown Initiative, the Accra-Marrakech Agenda, the UN Secretary General’s SDG Stimulus Proposal and the Paris Summit for a New Global Financing Pact.
''Urge the efforts to refine the G20 Common Framework for Debt Treatments, but remain concerned that these efforts lack both adequacy and timeliness,'' they said.
At the same time, the leaders urged the world to rally behind the proposal for a global carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation.
''That may also be augmented by a global financial transaction tax (FTT)) to provide dedicated affordable and accessible finance for climate positive investments at scale and ring fencing of these resources and decision making from geopolitical and national interests,'' they said.
