Funding biodiversity in Africa

Funding biodiversity in Africa

Africa is losing biodiversity at an alarming rate and funding is needed to reverse the trend. 

By Leon Louw, Director of Endorphin Expeditions and editor of the WhyAfrica magazine   

Funding biodiversity is defined as finance that contributes or intends to contribute to activities that conserve, restore, or avoid a negative footprint on biodiversity and ecosystem services.

Nature, underpinned by biologically diverse ecosystems, is critical to human survival, health, wellbeing, and economic prosperity.

According to the report Biodiversity Finance Reference Guide by the International Finance Corporation, half of global gross domestic product, or USD44-trillion, is generated in sectors such as construction, agriculture, and energy that highly or moderately depend on nature and its services.

Two-thirds of food crops rely, at least in part, on animal pollination. This natural capital, along with produced capital, human capital, and non-renewable natural resources, makes up countries’ wealth and generates income that drives economic growth and progress towards achieving the Sustainable Development Goals (SDGs).

Yet economic activity is causing biodiversity loss at an unprecedented rate through land- and sea-use change, unsustainable use of resources, pollution, and the spread of invasive species.

Funding to nature eroding activities (Funding biodiversity in Africa)

In a recent article published by WhyAfrica Yves Vanderhaeghen writes that scientists should highlight what can be done and engage with solutions even at the level of small landowners.

According to Professor Sally Archibald, who leads the Wits-based Future Ecosystems for Africa programme, scientists could provide a valuable role in directing funding towards projects where the evidence suggests positive change can be made.

Dr Odirilwe Selimane, an agricultural economist based at the University of Pretoria,  says that global funding flows towards “nature-eroding” investments, as opposed to “nature-building” investments.

“Therefore, it is imperative to ask whether we are using the land in the right way?

In gauging this, Selimane suggests two approaches. The first is to use a nexus assessment of the interlinkages between biodiversity, water, food, and health and how policy and practice tilt the balance to the benefit or detriment of any of these factors.

“Food production gets prioritised, sometimes in a way which harms water security and biodiversity. And so, if the nexus assessment gives a net negative result, the land is being used incorrectly, and if positive, then it is being used correctly,” says Selimane.

Funding crucial for conservation (Funding biodiversity in Africa)

The second important factor is to start from an understanding that conservation and development don’t need to be separate, and then ask how the flow of money (into development for example) is influencing the social and natural landscape.

“Funding and money are crucial to protect the environment and to reverse the negative impacts of climate change,” says Selimane.

Climate change: a key driver  (Funding biodiversity in Africa)

Since 1970, the Living Planet Index, which measures the state of the world’s biodiversity, has declined by nearly 70%, with 14 key ecosystem services currently in decline. Nature loss is fundamentally interconnected with climate change – both crises reinforce each other and present compound and systemic risks.

Climate change is a key driver of biodiversity loss, which diminishes ecosystems’ ability to provide climate change mitigation and adaptation benefits. This in turn intensifies the impacts of climate change, resulting in a vicious cycle of escalating effects.

According to the Biodiversity Finance Reference Guide by the International Finance Corporation restoring biodiverse ecosystems is a cost-effective way of building resilience and ability to adapt to the physical impacts of climate change. It also provides a way to substantially reduce carbon emissions to meet the goals of the Paris Agreement.

“Realising these benefits will require transitioning our economies to sustainable production practices that help halt and reverse biodiversity loss. Sustainable practices must address the key drivers of biodiversity loss and protect and enhance ecosystems.

“Strategic investment in this transition – with measures in place to ensure it is equitable and inclusive – can create long-term, local value.

A sustainable transition of food, land and ocean use, infrastructure and the built environment, and energy and extractives could create USD10.1-trillion in annual business opportunities, 395 million new jobs by 2030, and significant opportunities for income diversification, which supports the growth of local economies.

Funding the transition  (Funding biodiversity in Africa)

“Finance and innovative financial solutions are key to supporting the transition to nature-smart production practices and deploying nature-based climate solutions.

“Biodiversity finance – defined as finance that contributes or intends to contribute to activities that conserve, restore, or avoid a negative footprint on biodiversity and ecosystem services – has emerged as a fast-growing area in green finance.

“There is increased interest in financing the transition to nature-smart economic activity from investors, financial institutions, and bond issuers globally. However, there is currently a lack of guidance in the market on criteria for projects eligible for this kind of financing.

“To address this gap, IFC has developed the Biodiversity Finance Reference Guide. This guide, aimed at financial institutions and investors, provides an indicative list of investment projects, activities, and components that help protect, maintain, or enhance biodiversity and ecosystem services, as well as promote the sustainable management of natural resources.

It offers IFC’s perspective on potential investment opportunities and how targeted financing can help enable a transition to nature-smart business models and practices that combine conservation needs with sustainable development.

The document is primarily intended to provide a structured approach for investors and financiers to identify eligible use of proceeds that constitute biodiversity finance.

Companies can use it to identify opportunities to address the key drivers of biodiversity loss in their production practices, to integrate nature-based solutions into their operations, or to develop nature conservation activities.

The guide can also be used by policymakers to design biodiversity finance taxonomies. This guide is not a substitute for sustainability policies or environmental and social safeguards. It provides an overview of key criteria for selecting eligible projects that can qualify for biodiversity finance and outlines the key steps borrowers and issuers need to follow to develop biodiversity finance frameworks in line with the Green Bond Principles and Green Loan Principles.

For more information and to download the document visit

Human needs are crucial (Funding biodiversity in Africa)

However, even if the ultimate objective of funding biodiversity is conservation, saving ecosystems, reversing species extinction or climate change, engaging with human needs and activities remain crucial.

“When trying to protect or restore ecosystems you have to start with communities and people,” says Archibald.

In her work in the Niassa Reserve in Mozambique, Archibald noted that it was important not just to create conservation areas, but to find ways of incorporating and managing human activities within them in a way that contributes both to boosting ecosystems and livelihoods.

The challenges include the role of cattle and wood harvesting in these conservation environments, and also the expectations of top-end tourists who expect to see unspoilt wilderness and wild animals and who are offended by the sight of human activity.

Fezile Mtsetfwa, who studies the role of elephants in conservation reserves such as the Kruger National Park, added that it is important for the success of such an approach to establish a baseline of sustainability for wood harvesting.

Furthermore, it was important to advise communities on how managing resources entailed an understanding the important role of fire, and elephants themselves, in ecosystem health.

Funding biodiversity in Africa
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