E-Financial
Five Maddening Facts About Climate Finance
Analysis by Joe Kraus
New in-depth analysis finds that less than one-third of donors’ commitments have actually been dispersed for climate projects.
The injustices of climate change are well-known and keenly felt in Africa. The continent is responsible for just 4% of global carbon emissions yet experiences some of the worst impacts of the crisis. Climate change made the historic drought in East Africa, which left 20 million people hungry, 100 times more likely. It made the devastating damage wrought by Storm Daniel, which killed thousands in Libya last year, 50 times more likely. Africa is home to 14 of the world’s 20 most climate vulnerable countries.
To correct this injustice, industrialised countries – historically the world’s largest carbon emitters – have agreed to help developing countries finance their climate projects. The landmark 2015 Paris Agreement acknowledged the principles of “equity” and “common but differentiated responsibilities” in tackling climate change.
At least that’s the theory. Rich countries’ financial pledges to date cover a miniscule proportion of the sums needed. The $700 million pledged to the new Loss and Damage Fund at the COP28 climate talks, for instance, was understandably celebrated yet accounts for less than 0.2% of the $400 billion/year needed to compensate for the irreversible harms caused by climate change.
To add insult to injury, high-income countries make it incredibly difficult to track how much money they’re actually contributing and where it’s being spent. Climate finance reporting is a mess: it’s confusing, slow, and imprecise. We’re in the fight of our lives and no one is adequately checking and publishing the receipts.
That’s why my colleagues and I at the ONE Campaign spent months cleaning and analysing climate finance data and launched The Climate Finance Files. They reveal in unprecedented detail how much governments and international institutions are spending to support climate-vulnerable countries.
Here are five maddening facts we discovered.
1) Nobody knows how much climate finance is being delivered
In this age of information and digitised everything, it is astounding (and tragic) that we lack accurate public accounting of international climate finance. That’s partly because there are no standardised reporting rules, guidelines, or definitions that apply across all donors. Instead, high-income countries and international financial institutions decide for themselves what is and isn’t climate finance. Depending on who’s counting, you can get drastically different numbers.
For instance, data reported to the Organisation for Economic Co-operation and Development (OECD), which tracks and reports official flows like aid, uses an approach that counts projects that have any climate component — regardless of how small — as 100% climate finance.
Data reported to the UN Framework Convention on Climate Change (UNFCCC) — the official body tasked with collecting the data — is meant to reduce overcounting. But, as the chart below shows, donors’ reporting methodologies vary significantly. A few providers do what you might expect – i.e. calculate the actual climate portion of a project and report those figures. But the majority use simplistic shortcuts that can lead to significant over-counting.
For projects whose main focus is climate, most donors report them as 100% climate finance. For projects with a partial climate focus, most donors have a certain fixed percentage that they apply to calculate how much should be counted as climate spending. The most common fixed percentage is 40%, followed by 50%, followed by 100%. This means that if a project only has a small focus on climate, 40% of the total project – or even 100% in some cases – may be counted as climate finance.
Those decisions can substantially impact climate finance figures. To illustrate, we took 22 randomly selected projects reported to the UNFCCC by country A, which assessed on a case-by-case basis their contribution to climate finance. We applied two different methodologies to those projects: for the first, we counted 100% of projects marked “principal” and 40% of projects marked “significant”; for the second, we counted 85% of projects marked “principal” and 50% of projects marked “significant”. For the same projects, countries using these methodologies would have reported one-third less and one-fifth less than country A. If reported to the OECD, meanwhile, the total would be inflated by 50%.
2) Rich countries are providing much less than they claim
Our analysis reveals that climate finance providers’ claims are vastly overstated. Nearly half of climate finance commitments counted by the OECD are never reported as disbursed. Those commitments are either never delivered (i.e. broken promises) or missing key data (i.e. poor accounting).
We found that between 2013 and 2021, $228 billion in climate finance commitments had not been disbursed. For an additional $69 billion in projects, we couldn’t even find disbursements data, making progress impossible to assess. That amounts to an eye-popping $297 billion between 2013 and 2021.
3) “Climate finance” is being used to build coal-fired power plants
The lack of standardised reporting rules enables all kinds of creative accounting. Japan has counted the financing of coal-fired power plants as climate finance. Both Japan and the US have used climate finance to expand the use of natural gas. Italy has financed a chocolate shop, outfitted its police, and — along with the EU — labelled counterterrorism efforts as climate finance.
A UK announcement in October 2023 perfectly illustrates the absurdity of letting providers decide what counts toward their targets, with no standardised process or oversight. The UK plans to broaden its definition of climate finance so it can take credit for providing more of it — without actually providing any more money. That includes applying fixed coefficients for some of its multilateral and humanitarian aid rather than counting actual spending, the same imprecise methodology that many other climate providers use that often yields inflated figures.
Added together, at least $1 in every $5 of commitments in the OECD’s open dataset between 2013 and 2021 — worth $115 billion — is spent on things that have little or nothing to do with climate.
Taking into account the $228 billion not dispersed and $69 billion missing disbursement data, this means just $204 billion has actually been dispersed for climate projects between 2013 and 2021. That is not even one-third of the total $616 billion supposedly committed to climate finance in that period.
4) Only a small fraction goes to the most climate vulnerable countries
The world’s 20 most vulnerable countries received a total of $1.7 billion in climate finance disbursements in 2021. That’s just 6.5% of the $26.1 billion those countries need each year to address climate change.
As a result, cash-strapped African countries are being forced to choose between addressing climate change or investing in other pressing priorities, like feeding, caring for, and educating their people. The Democratic Republic of the Congo, for instance, needs $4.8 billion in climate finance per year to implement a green energy transition and adapt to climate change yet received just $182 million from international providers in 2021. That enormous shortfall means its government, and many like it, have to decide whether to underfund climate change efforts or divert support away from other critical priorities like healthcare which, in the DRC, accounted for just 0.7% of GDP in 2020, far below the recommended 5% threshold.
5) Many debt-distressed countries pay more in debt than they receive in climate finance
Of the 46 (out of 54) countries with severe debt problems for which we have debt payment data, 20 (43%) paid more in debt payments to lenders between 2019 and 2021 than they received in climate finance. Seven of those countries are in Africa.
To make matters worse, much of the climate finance those heavily-indebted countries receive is in the form of new debt. More than half (58%) of all climate finance disbursed to the 54 countries with severe debt problems between 2019 and 2021 was in the form of loans. Nearly $1 in every $4 of climate finance for those countries was a non-concessional loan (loans at, or close to, market rates). That risks deepening those countries’ debt problems and jeopardising their ability to meet their citizens’ needs and tackle climate change.
It doesn’t need to be this way. Incredible progress in our ability to track and share complex data means that we have the ability to track — with precision — every dollar being spent on climate. Not doing so is a political choice. And it’s one that must change.
African governments should pressure donor governments and international financial institutions to agree to and implement a robust, standardised reporting system. That way they — and importantly, their citizens — can know how much money is available to address climate change and monitor its use. The climate crisis is too urgent and too critical to continue to allow climate financing to happen in the dark.
Joe Kraus is Policy Director at the ONE Campaign.
Read the original of this report, including embedded links and illustrations, on the African Arguments site.
Securities and Exchange Commission (SEC) has commenced a nationwide enlightenment campaign to help Nigerians recover unclaimed dividends and other monies arising from capital market transactions.
The campaign, which began with a town hall meeting in Lagos on Thursday, is aimed at sensitising investors on the existence of unclaimed monies, the role of the National Investor Protection Fund (NIPF) and the procedures for verifying and recovering legitimate claims.
Emomotimi Agama, director-general of SEC, who was represented at the event by Hafsat Rufai, director, Registration and Exchanges, Market Infrastructure Department, said the initiative was necessary to ensure that funds belonging to investors were returned to their rightful owners.
Agama said unclaimed monies administered by the NIPF included return monies from public offers, scheme consideration from mergers, acquisitions and corporate restructuring transactions, as well as other funds belonging to investors that had remained unclaimed.
He noted that the Commission considered it unacceptable for investors’ funds to remain unclaimed, adding that many investors and their families were either unaware that such monies existed or did not know the procedures for recovering them.
Agama said the SEC Board had approved a nationwide public enlightenment campaign to sensitise Nigerians on unclaimed monies, the role of the NIPF and the process for making legitimate claims.
He said the Lagos programme marked the commencement of the outreach, which would subsequently cover the six geopolitical zones and the Federal Capital Territory.
The director-general said the campaign would also address the transmission of securities following the death of an investor, noting that families were often unaware that their deceased relatives owned shares or other capital market investments.
He said even when beneficiaries were aware of such investments, many lacked knowledge of the legal and administrative procedures required to obtain probate or letters of administration and transmit the investments to the rightful beneficiaries.
Agama said the Lagos programme included an expert session on probate administration and the transmission of securities to demystify the process and provide practical guidance to investors and their families.
He urged investors to maintain proper records of their investments and encouraged families to take steps to preserve inherited wealth.
The SEC DG also warned Nigerians against Ponzi schemes and other fraudulent investment arrangements, saying fraudsters continued to exploit economic pressures and digital platforms to lure unsuspecting members of the public with promises of guaranteed and unusually high returns.
He urged the public to be cautious of investment opportunities offering risk-free returns, stressing that investor education and vigilance remained critical to combating financial fraud.
Speaking on behalf of Lawal Pedro, attorney-general and commissioner for Justice,Lagos State, Olujoke Ogunojemite, deputy director in the Ministry of Justice, commended the SEC for extending the campaign to Lagos and recognising the role of legal institutions in resolving issues relating to unclaimed dividends and other assets.
She said the issue had a practical impact on beneficiaries who were unable to access assets after the death of their loved ones.
Ogunojemite said the ministry was committed to ensuring that legal processes did not become barriers to beneficiaries seeking to recover legitimate assets.
She described the SEC’s outreach as commendable, saying it would help restore assets to their rightful beneficiaries.
World Bank has said that despite nearly three years of economic reforms by the federal government, about 79 per cent of Nigerians remain poor or vulnerable to falling into poverty.
The bank stated this in its newly approved Country Partnership Framework for Nigeria, covering 2026 to 2032, and its accompanying Streamlined Country Diagnostic.
The report which highlighted the country’s deepening social and economic challenges, indicated that while recent macroeconomic reforms have helped stabilise the economy and restore investor confidence, the benefits have yet to translate into meaningful improvements in living standards for most Nigerians.
The World Bank noted that the seven-year strategy seeks to support Nigeria’s ambition to create more and better jobs through private-sector-led growth while accelerating poverty reduction.
According to the Streamlined Country Diagnostic document, “Thirty-three per cent of its population is ultra-poor (food insecure by age-weighted caloric intake), 61 per cent is below the poverty line, and 79 per cent is near poor (below the poverty line or vulnerable to falling back into poverty).”
The World Bank pointed out that Nigeria’s economic performance over the past decade had been constrained by structural rigidities, policy missteps, dependence on crude oil, and repeated external shocks, leaving millions trapped in poverty.
It stated that about 139 million Nigerians currently live below the national poverty line, with poverty concentrated largely in the northern part of the country.
The report also noted that more than 86 million Nigerians remain without electricity, while three to four million young people enter the labour market every year with limited employment opportunities.
It added that sustaining macro-fiscal and structural reforms would be critical to reducing inflation, expanding fiscal space and ensuring that recent economic stabilisation translates into improved living standards.
According to the report, the reforms have begun to improve macroeconomic indicators.
Economic growth increased from 3.5 per cent in the first half of 2024 to 3.9 per cent during the corresponding period of 2025, foreign reserves exceeded $42bn, fiscal deficits narrowed, and investor confidence strengthened.
However, it warned that high inflation continues to undermine household incomes. The report stated, “High inflation, though declining, continues to erode real incomes, particularly for the poor. Social protection efforts to support the most vulnerable have been slow and uneven in their rollout.”
The World Bank added that although the reforms helped Nigeria avoid a more severe economic crisis, institutional weaknesses, weak policy coordination, and inadequate budget transparency continue to pose significant risks.
It warned that sustained reform implementation, backed by deeper structural measures, would be required to improve Nigeria’s medium-term economic outlook.
Under the new Country Partnership Framework, the World Bank said job creation would serve as the primary pathway for reducing poverty.
The report explained that international experience from countries such as India, Indonesia, and China shows that moving people into productive employment remains the most effective tool for reducing poverty.
To achieve this, the framework will prioritise labour-intensive sectors, particularly agriculture and micro, small and medium enterprises, while addressing structural deficiencies in electricity, digital infrastructure, education and healthcare.
The Nigeria Revenue Service (NRS) said the rollout of electronic invoicing (e-invoicing) will strengthen tax compliance, curb revenue leakages and improve transparency in tax administration as it moves to fully digitise the country’s tax system.
The Project Lead, NRS e-Invoicing Project, Mohammed Bawa, stated this at the DigiTax E-Invoicing Compliance Breakfast Session held in Lagos.
The event, organised by DigiTax, an NRS-accredited e-invoicing platform, formed part of efforts to support the agency’s ongoing education and sensitisation campaign on the e-invoicing mandate.
Bawa said the initiative aligns with global trends in tax digitization and is expected to help improve Nigeria’s tax-to-GDP ratio, which remains one of the lowest in Africa.
According to him, the system will provide the NRS with greater visibility into transactions across sectors, formalise activities within the informal economy and standardise invoice formats nationwide using globally recognized invoice schemas.
He added that e-invoicing would improve operational efficiency for both businesses and tax authorities while supporting the NRS’ transition from manual and electronic tax administration processes to a fully automated system-to-system interaction model.
Bawa noted that the legal framework for implementation is backed by the Nigeria Tax Administration Act, which prescribes penalties for non-compliance.
He disclosed that the NRS has completed onboarding large taxpayers and is preparing to enforce compliance with defaulting entities.
According to him, medium taxpayers are expected to begin compliance in the third quarter of 2026, while onboarding of emerging taxpayers will commence in 2027, with full adoption targeted for all taxpayers by the end of 2028.
Bawa urged taxpayers yet to be onboarded onto the platform to begin the process and work with accredited service providers to ensure compliance.
Speaking at the event, Country Director of DigiTax Nigeria, Olumide Akinsola, urged businesses to look beyond their internal systems and assess the compliance status of suppliers and counterparties.
He warned that businesses whose suppliers fail to transmit invoices through the MBS platform risk losing eligibility to claim Value Added Tax (VAT) input credits on such transactions, describing the resulting supply chain exposure as a significant commercial risk that many organisations have yet to quantify.
Akinsola also announced the launch of DigiTax’s white paper, ‘The State of E-Invoicing Readiness in Nigeria,’ which examines compliance adoption trends and the readiness gap across different taxpayer segments.
He added that DigiTax operates in Nigeria, Kenya, Zambia and the United Arab Emirates (UAE), noting that experience from those markets shows businesses that integrate early are better positioned to avoid disruptions when enforcement begins.
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