As climate change tightens its grip on Ghana, threatening food production, water security, coastal livelihoods and public health, the question of how the country finances its climate response has become increasingly urgent.
Climate finance, the flow of funds aims at reducing greenhouse gas emissions and strengthening resilience against climate impacts, sits at the heart of Ghana’s climate agenda.
While the country has made notable strides in mainstreaming climate finance into national planning, significant funding gaps persist, raising concerns about the pace and scale of action required to meet its international commitments.
According to analysis by the Center for Opportunities and Rural Development (CORD Ghana), climate finance tracked in Ghana between 2019 and 2020, averaged about USD 830 million annually.
This figure represents only five to nine per cent of the estimated investment required each year for Ghana to meet its climate targets under the Paris Agreement.
The shortfall is particularly worrying for adaptation efforts, especially in vulnerable northern and coastal communities already grappling with erratic rainfall, prolonged droughts, and flooding.
Public funds dominate climate finance
Ghana’s climate finance architecture draws from domestic budgets, multilateral development partners, and international climate funds. However, CORD Ghana notes that the bulk of tracked climate finance continues to originate from the public sector, with limited private sector participation.
To improve coordination and resource mobilisation, the Ministry of Finance has established a Climate Financing Division, tasked with managing climate-related funds, aligning national priorities with global climate goals, and developing bankable projects to attract investors.
Despite these institutional reforms, experts argue that mobilising finance at the scale required remains a daunting challenge.
Accessing global climate funds
Ghana has benefited from support from major international climate finance mechanisms, particularly the Green Climate Fund (GCF).
A flagship USD 120 million GCF–UNEP programme, of which about USD 70 million is earmarked for Ghana, is supporting climate adaptation in the North East and Upper West Regions.
The programme focuses on strengthening agro-ecosystem resilience, establishing early warning systems, and improving access to water resources for vulnerable communities.
Again, the UNDP-assisted GCF Readiness Programme is helping Ghana build institutional capacity and develop climate investment plans to improve direct access to climate finance.
Carbon markets and private finance.
In a significant milestone, Ghana became the first African country to issue carbon credits compliant with the Paris Agreement.
Under Article 6, 11,733 tonnes of carbon offsets have already been transferred, opening new opportunities for climate finance through international carbon trading.
Public private partnerships are also emerging as a key strategy to unlock private capital.
Recent collaborations, including one involving Fidelity Bank Ghana and the Global Center on Adaptation, aim to integrate climate risk considerations into financial products and services. Innovative financial instruments are also being deployed.
Ghana has secured a sovereign disaster risk financing policy under the Africa Risk Capacity, enabling rapid access to funds during severe droughts to protect vulnerable farming communities.
Long-term vision at the policy level
Ghana’s ambitions are outlined in the Climate Prosperity Plan (CPP), announced at COP29. The plan seeks to merge climate action with economic growth, targeting the mobilisation of USD 75–76 billion by 2050 through investments in renewable energy, sustainable infrastructure, blended finance, and public–private partnerships.
CORD Ghana describes the CPP as a bold framework but cautions that translating vision into action will require sustained political commitment and credible financing mechanisms.
Persistent challenges
Despite recent gains, several challenges continue to undermine climate finance delivery. Chief among them is the sheer scale of the funding gap, particularly for adaptation.
Private sector engagement remains limited, with stakeholders pointing to insufficient incentives, high perceived risks, and weak project pipelines.
There are also ongoing policy debates around carbon taxation, with civil society groups warning that poorly designed taxes could disproportionately affect low-income and vulnerable populations.
At the international level, Ghana and other developing countries continue to highlight the unfulfilled climate finance commitments of developed nations, stressing that global responsibility must match global ambition.
Looking ahead, Ghana’s growing leadership on climate issues has earned it international recognition, including its election as incoming chair of the Climate Vulnerable Forum and the V20 Group of Finance Ministers.
Observers see this as an opportunity to advocate fairer and more accessible climate finance for vulnerable economies.
CORD Ghana notes that recent efforts to engage the private sector through investor roundtables and capacity-building masterclasses signal a strategic shift toward mobilising investment beyond traditional grants and concessional loans.
Going forward, analysts say Ghana must strengthen institutional capacity, deepen private sector involvement, expand access to carbon markets, and ensure that international climate finance commitments are honoured.
As climate risks intensify, the effectiveness of Ghana’s climate finance framework may well determine how resilient its communities and economy will be in the decades ahead.
GNA