At the IMANI Dialogue on Budget Gap Financing, Cedric Dzelu, Technical Director at the office of the Minister of State for Climate Change and Sustainability, emphasized the urgent need to integrate climate resilience into Ghana’s macroeconomic planning.
Speaking on behalf of the Minister, Mr. Dzelu emphasized that climate change is no longer just an environmental concern but a fundamental economic challenge.
“Ghana, like many other economies in the Global South, faces the dual burden of fiscal constraints and the need for large-scale investments in climate adaptation and mitigation.”
Cedric Dzelu, Technical Director at the office of the Minister of State for Climate Change and Sustainability
Mr. Dzelu stressed that the increasing frequency of climate-induced shocks exacerbates economic vulnerabilities, creating a cycle of rising debt burdens and high borrowing costs.
To break this cycle, he called for “innovative and sustainable financing solutions that future-proof our economy while driving green growth.”
International Financial Institutions (IFIs) such as the International Monetary Fund (IMF), World Bank, and African Development Bank (AfDB) have historically played a crucial role in stabilizing African economies.
Ghana has been a beneficiary of 17 IMF-supported programs since 1957, with the most recent Extended Credit Facility (2023-2026) offering much-needed fiscal relief.
However, as Mr. Dzelu pointed out, “While these programs have facilitated key reforms, challenges in public financial management and structural transformation persist.”
He urged IFIs to integrate climate considerations into their economic stabilization efforts, advocating for budgetary and balance-of-payment support that aligns with Ghana’s climate resilience objectives.
He cited the World Bank’s recent pledge to align all new operations with low-carbon, climate-resilient development as a positive step, but emphasized the need for deeper commitments.
“We need to go further. Ghana must work with IFIs to ensure that climate resilience is at the core of macroeconomic and fiscal planning, driving sustainable economic transformation.”
Cedric Dzelu, Technical Director at the office of the Minister of State for Climate Change and Sustainability
Integrating Climate into Macroeconomic Planning
To guide Ghana towards a climate-resilient economy, Mr. Dzelu outlined several strategic opportunities for integrating climate considerations into macroeconomic planning.
He proposed reforms across various sectors, beginning with debt management. “Our debt sustainability frameworks must account for climate risks and targets,” Mr. Dzelu asserted.
This would help Ghana maintain long-term financial stability while also supporting investments aligned with climate goals.
He also called for fiscal reforms, specifically in climate-responsive budgeting and taxation policies that incentivize low-carbon investments.
In addition to these fiscal measures, Mr. Dzelu stressed the importance of governance reforms. Strengthening climate expertise within government institutions is essential for making informed decisions on climate financing.
He also proposed leveraging green industrial policies and pursuing a just transition for workers affected by the shift to a low-carbon economy.
“We must focus on reskilling young people for green transition jobs, such as renewable energy engineers and electric vehicle technicians.”
Cedric Dzelu, Technical Director at the office of the Minister of State for Climate Change and Sustainability
He called for the collaboration of IFIs to help transform state-owned enterprises and market regulations.
Strategic Recommendations for Sustainable Growth
Looking forward, Mr. Dzelu provided strategic recommendations for ensuring that Ghana’s economic growth remains both sustainable and climate-compatible.
These recommendations focused on deepening the integration of climate resilience into existing economic frameworks.
“Structural benchmarks within IMF and World Bank programmes should include climate resilience targets, ensuring that our economic recovery is aligned with long-term sustainability.”
Cedric Dzelu, Technical Director at the office of the Minister of State for Climate Change and Sustainability
He stressed the importance of aligning international financial support with Ghana’s climate goals. He also advocated for greater stakeholder engagement, urging IFIs to collaborate closely with local actors such as civil society organizations and the private sector.
In line with these suggestions, Mr. Dzelu proposed exploring innovative financing mechanisms like climate-linked debt restructuring. Debt-for-climate swaps, he argued, “could ease fiscal constraints and enable increased climate spending, ensuring that Ghana’s sustainability ambitions do not take a back seat to short-term financial pressures.”
Furthermore, he recommended strengthening the Climate Division at the Ministry of Finance, highlighting the importance of a multi-year technical assistance programme supported by multilateral partners.
Finally, Mr. Dzelu proposed the development of a detailed Climate Finance Action Plan to outline clear financing sources for green investments.
The Minister’s speech highlighted the government’s resolve to turn climate challenges into economic opportunities. “Ghana stands at a critical juncture where climate resilience and economic sustainability must be pursued hand in hand,” Mr. Dzelu emphasized.
“Our success in achieving this balance depends not only on prudent fiscal management but also on how well we integrate climate action into our economic recovery strategies.
“Through strengthened collaboration with IFIs, robust institutional reforms, and a clear commitment to green industrialization, we can turn climate challenges into economic opportunities.”
Cedric Dzelu, Technical Director at the office of the Minister of State for Climate Change and Sustainability
As Ghana charts its path toward a sustainable future, the need for a coordinated, forward-thinking approach to climate finance has never been more critical.
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