Africa’s finance sector adopts first continent-wide sustainable investment framework

Africa has taken a major step toward integrating climate and social priorities into its financial systems with the validation of the continent’s first Sustainable Finance Taxonomy.

The framework, endorsed in Nairobi on July 16–17 by regulators, commercial banks, insurers, and development finance institutions, provides a standard set of definitions for economic activities that advance sustainable development.

Driven by the African Development Bank (AfDB) through its African Financial Alliance on Climate Change (AFAC), the taxonomy aims to bridge a critical gap in Africa’s financial sector, the lack of consistent, Africa-specific tools to channel capital into green and socially responsible projects.

Technical input came from PricewaterhouseCoopers Luxembourg, with funding support from the Global Center on Adaptation via the Africa Adaptation Acceleration Program and the African Climate Change Fund.

“This is a transparent, African-developed framework that aligns with global standards while reflecting our national priorities,” said Nana Sika Ahiabor, Manager of the Climate and Sustainability Office at the Bank of Ghana. She urged adoption across the continent, noting its potential to scale up green finance.

Participants at the two-day workshop stressed the tool’s role in harmonising financial markets, attracting sustainable investment, and bolstering resilience. “The process was insightful and rewarding, especially as we worked through practical case studies,” said BRITAM Kenya’s Finance Manager, Ann Njuguna.

For Mahamadi Balima of the Financial Markets Authority of the West African Monetary Union, the taxonomy will “guide capital flows toward sustainable investments, enhance integration, and attract both regional and global impact investors.”

Standard Bank’s Rochelle Chetty described the collaborative testing process as “a vital step toward implementation,” while AfDB’s Director of Climate Change and Green Growth, Prof. Anthony Nyong, called the taxonomy “a critical milestone” in Africa’s climate finance agenda.

Ahmed Attout, AfDB’s Director of Financial Sector Development, said the extensive consultations behind the framework reflect the Bank’s “deep commitment” to helping financial institutions manage sustainability risks and unlock green investment opportunities.

With climate pressures mounting, the African Sustainable Finance Taxonomy is expected to underpin a transparent, aligned, and globally connected financial ecosystem tailored to the continent’s growth priorities.