Africa’s Carbon Market Awakening: From Potential to Power
Africa is on the brink of a carbon market revolution that could transform its economies, boost climate action, and deliver new funding for development. Long seen as possessing enormous, untapped natural resources—from rainforests to mangroves and expansive savannahs—the continent is emerging as a focal point for a new wave of interest in carbon credits.
Though Africa is home to over 60% of the world’s uncultivated arable land and more than 16% of the global population, it currently hosts less than 11% of global voluntary carbon credit issuances. This mismatch underscores the huge growth opportunity as countries and investors recognize the critical role of Africa’s landscapes in climate mitigation.
In recent years, global demand for carbon credits has soared, as companies and governments seek tools to achieve net-zero targets. Africa’s unique ecosystems position it at the forefront of nature-based solutions—including reforestation, land restoration, and renewable energy projects—which generate high-quality credits with tangible environmental and social co-benefits.
However, the continent faces formidable challenges in realizing this potential. Investment has often been hampered by limited technical expertise, regulatory uncertainty, and gaps in market infrastructure. For too long, African countries have been price takers and mere hosts for projects dominated by international firms, with limited participation in project design, ownership, and profit-sharing.
Recognizing both the climate and development stakes, African leaders are galvanizing action. At the inaugural Africa Climate Summit in 2023, the African Carbon Markets Initiative (ACMI) pledged to unlock up to 300 million carbon credits annually by 2030—equivalent to more than $6 billion in annual revenue—and generate 30 million jobs. The ACMI, supported by governments, philanthropies, and private sector actors, aims to drive credibility, scalability, and equitable benefit-sharing in the continent’s carbon markets.
“Africa can lead the world in climate-positive growth, but only if our carbon markets are built on integrity and shared prosperity.”
Momentum is building among investors, policymakers, and international institutions to address key market failings. Efforts are underway to establish robust standards, transparent registries, and local technical capacity. Improved regulatory frameworks are empowering governments—from Kenya to Nigeria—to attract quality projects, retain more value on the continent, and ensure that local communities are true beneficiaries.
With the right investments and governance, Africa’s carbon market could shift from being a story of untapped potential to one of considerable power. By leveraging its natural assets and pursuing just, well-governed market frameworks, the continent stands to unlock not only climate finance, but also a new era of sustainable, inclusive growth.
Team V.INO-LNK
