African economies stand at a tantalising crossroad. In one direction a signpost points to the “legacy economy” — extractive, exclusive and debt-heavy; historically reliant on raw commodity exports with minimal local value addition — while in the other direction a new economic paradigm beckons — representative, reciprocal and restrained; focused on green industrialisation, local beneficiation and nature-positive growth. To sum up the opportunity and the imperative in simple terms: “Africa needs to own more of its value chain”, as Nedbank chair Daniel Mminele put it at the end of last year at the launch of the B20 task force report on just energy transitions. Daniel Mminele. Picture: SUPPLIED (Nedbank) There are many reasons to think most African economies will miss the off-ramp. One of the main obstacles is unlocking the finance needed to change direction. The other is climate change, which threatens to knock a new development trajectory off course. Put them together and you inevitably end up talking about climate finance. Take Kenya. The premise of a new Cambridge Institute for Sustainability Leadership (CISL) study published on Wednesday is that the East African country stands at a consequential juncture in its climate and development trajectory. But in “Beyond the Illusion of Innovative Climate Finance at Scale in Africa: A Market-informed Blueprint for Kenya’s Just and Resilient Climate Transition”, Yvonne Maingey-Muriuki reveals a persistent and widening gap between climate ambition and actual climate finance mobilisation and deployment. As she points out, this gap is not simply a matter of insufficient capital entering the system; it is the result of deeper structural and institutional misalignments that prevent capital from flowing to where it is most needed. Insights from Kenya’s financial institutions demonstrate that climate finance remains peripheral to banking strategy, constrained by sovereign risk pricing, currency volatility, regulatory compliance burdens, unclear commercial incentives and an innovation ecosystem that prioritises technology over risk transformation. This chimes with a notable shift in the climate finance discourse in the past two years. Gone are the self-deceptive tropes about attracting private capital from, say, a Toronto pension fund, while on the other side of the balance sheet ― so to speak ― there is a recognition that in this so-called “post-aid world” concessional or grant finance from multilateral development banks or developed countries that are more concerned with increasing their defence spending is even more illusory. Instead there is a new consensus that the capital is here in Africa ― $4-trillion of unutilised or underutilised capital, dwarfing the $1.3-trillion the continent needs annually for its economic transition. The exam question is: how do we unlock it? The CISL concludes that a “country investment platform”, anchored in strong presidential leadership, embedded within core economic ministries and cogoverned with private financial institutions emerges as a necessary structural mechanism to translate Kenya’s just transition commitments into investable pipelines and scalable financial instruments. Instead there is a new consensus that the capital is here in Africa ― $4-trillion of unutilised or underutilised capital, dwarfing the $1.3-trillion the continent needs annually for its economic transition. South Africa has its own experience of such a thing ― the just energy transition (JET-P) ― globally lauded as a pioneer and a success case. Country platforms have become the flavour of the month in development and finance circles. At first the Kenyan government turned its nose up at the idea, but now its head has been turned, apparently by the prospect that such an approach could help attract the finance needed. And here’s the real rub: the first generation of country platforms was focused more on mitigation of climate risk, such as the JET-P. Now, as the science tells us that global warming is not being contained, the focus shifts to adapting to the harsh consequences of climate breakdown. As Maingey-Muriuki argues, “Ultimately, adaptation is the litmus test of whether Kenya can deliver a just transition. Success will depend on whether the country can build a financial architecture that channels capital to its most climate-exposed citizens.” South Africa is also moving towards a new country platform for adaptation and so the two countries will be in step as they strive to answer the exam question. • Calland is director of the University of Cambridge Institute for Sustainability Leadership Africa Programme.