By Obinna Uballa
Africa’s financial industry has endorsed a landmark Sustainable Finance Taxonomy aimed at directing capital toward climate-smart and socially responsible investments, marking a major step toward aligning the continent with global sustainability goals.
The reports were released today, August 13, 2025. However, the framework which is the first of its kind for Africa, was validated at a workshop in Nairobi from July 16–17, with participation from regulators, commercial banks, insurance firms, and development finance institutions.
Led by the African Development Bank (AfDB) through its African Financial Alliance on Climate Change (AFAC) platform, the Grading offers standardised definitions for activities that contribute to sustainable development.
According to the AfDB, it is designed to address a long-standing gap in Africa’s financial architecture: the absence of tailored tools to unlock domestic sustainable finance.
The initiative follows a 2021 survey of African financial sector stakeholders, which identified the need for such a framework, and is embedded in AFAC’s five-year strategy and Vision 2030 plan.
Technical support came from PricewaterhouseCoopers Luxembourg, with funding from the Global Center on Adaptation through the Africa Adaptation Acceleration Program and the African Climate Change Fund.
Although voluntary, the taxonomy has been hailed as timely. “It offers a transparent framework to classify assets and financial activities that support sustainability in an African context,” said Nana Sika Ahiabor, Manager of the Climate and Sustainability Office at the Bank of Ghana.
She urged African countries to adopt the “tool developed by Africans, for Africa,” noting its alignment with global standards and national priorities.
Industry representatives highlighted the potential for the taxonomy to harmonise financial markets, attract green capital, and boost economic resilience. “The process was insightful and rewarding, especially as we worked through real-world case studies,” said Ann Njuguna, Finance Manager at BRITAM Kenya.
Mahamadi Balima, Head of Sustainable Finance at the Financial Markets Authority of the West African Monetary Union (AMF-UMOA), described it as “a strategic tool to guide capital flows toward sustainable investments, strengthen economic resilience, and foster inclusive growth.”
Standard Bank’s Rochelle Chetty said the collaborative process of testing the taxonomy in real scenarios was “a vital step toward implementation.”
Senior AfDB officials hailed the validation as a “critical milestone” in Africa’s climate finance architecture. “It is a key pillar of the Bank’s Climate Change and Green Growth agenda,” said Prof. Anthony Nyong, Director of the Climate Change and Green Growth Department.
The newly validated taxonomy is expected to serve as a cornerstone for building a coherent, transparent, and globally connected sustainable finance ecosystem rooted in the continent’s development priorities.
