In the urgent race to combat climate change, the world has discovered an unexpected form of currency: carbon credits. As global industries work towards decarbonisation, carbon credits—tradable permits allowing the holder to emit a certain amount of carbon dioxide—have emerged as an innovative tool for balancing emissions. The principle is simple: entities that emit more carbon than permitted can offset their excess emissions by purchasing credits from projects that reduce or remove greenhouse gases from the atmosphere. This growing market, once dominated by industrialised nations, is increasingly drawing the attention of African countries, whose forests, wetlands, and renewable energy potential position them as key players in the green economy.
Globally, the carbon credit market has evolved from a niche mechanism into a multibillion-dollar industry. According to Statista, the global voluntary carbon offset market shrank by 61 per cent in 2023. The value of traded carbon credits that year was 723 million U.S. dollars, compared with 1.9 billion U.S. dollars the previous year. As of 2023, the cumulative value of the voluntary carbon market stood at roughly 10.8 billion U.S. dollars. This expansion is driven largely by net-zero commitments from corporations, regulatory tightening in developed economies, and the rise of carbon offset projects—especially those that capture or store carbon through nature-based solutions. Major companies such as Microsoft, Amazon, and Shell have made sizeable investments in carbon offsets as part of their decarbonisation strategies. However, as demand increases, the spotlight is turning toward the Global South, particularly Africa, where vast natural carbon sinks remain relatively untapped and under-monetised.
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Africa, endowed with dense rainforests, grasslands, and renewable energy potential, holds significant leverage in this emerging market. The continent contributes just around 3 per cent of global greenhouse gas emissions but possesses some of the world’s most effective carbon sequestration environments. The Congo Basin alone stores over 80 billion tonnes of carbon. With these natural assets, Africa stands to gain economically from the carbon credit trade. According to a 2023 report by the Africa Carbon Markets Initiative (ACMI), Africa could generate up to 1.5 to 2 billion carbon credits per year by 2050, potentially unlocking more than $50 billion annually. However, the realisation of this potential requires political will, regulatory clarity, and equitable systems that ensure local communities benefit.
Two countries, Kenya and Gabon, have emerged as forerunners in Africa’s carbon credit push. Each is leveraging different strategies but converging on a common goal: to turn environmental stewardship into economic value.
Gabon, often referred to as one of the “lungs of the planet” due to its 88 per cent forest cover, is pioneering carbon credits through forest conservation. Under a landmark deal with the Central African Forest Initiative (CAFI), Gabon received $17 million in 2021 as the first instalment of a performance-based agreement designed to reward its success in maintaining low deforestation rates. The agreement, valued at $150 million over ten years, is structured around Gabon’s verifiable emission reductions from forest preservation. In 2022, Gabon became the first African country to receive results-based payments for reducing emissions through forest protection, claiming it had avoided around 90 million tonnes of CO₂ emissions between 2000 and 2010.
But Gabon’s approach is not without challenges. The country’s political environment became uncertain following a military coup in 2023, casting doubt on the continuity of its environmental commitments. Moreover, critics argue that while carbon credit revenues are helpful, they are insufficient to compensate for the economic opportunity costs of halting activities like logging or mining. Still, Gabon’s example shows how African countries can claim climate finance for environmental stewardship.
Kenya, on the other hand, is advancing a regulatory and legislative framework that seeks to integrate carbon credits into its national economic planning. Recognising the importance of governance in the carbon economy, Kenya proposed the Carbon Credit Trading and Benefit Sharing Bill in 2023. The bill outlines a legal structure for carbon trading in the country, including the establishment of a Carbon Trading and Benefit Sharing Authority. It aims to register, monitor, and regulate all carbon credit transactions within the country to avoid exploitative practices, particularly by foreign developers. The bill also mandates a benefit-sharing formula that ensures communities on whose lands these projects are implemented receive a fair share of the proceeds.
Kenya has already seen growth in voluntary carbon offset projects, particularly in the reforestation, clean cooking, and renewable energy sectors. The Kasigau Corridor REDD+ Project, for example, protects over 200,000 acres of dryland forest in southeastern Kenya and has issued millions of carbon credits on the voluntary market. The project, run by Wildlife Works, has generated employment, built schools, and funded healthcare in local communities, all financed by carbon credits. However, controversy has emerged over the lack of transparency in revenue sharing, leading to calls for stricter regulation. Kenya’s draft bill attempts to address such issues by making it mandatory for developers to disclose income and revenue splits.
Despite these positive developments, the African carbon credit economy is still in its infancy and grapples with several structural and ethical dilemmas. One major issue is the credibility and quality of carbon credits. Investigations by global media outlets in 2023 uncovered that many forestry-based offset projects—including some in Africa—had exaggerated their impact, casting doubt on the legitimacy of the voluntary carbon market. Organisations such as the Integrity Council for the Voluntary Carbon Market (IC-VCM) have since introduced Core Carbon Principles aimed at standardising quality across the market. Still, critics argue that more must be done to ensure environmental integrity.
Moreover, there is a political dimension to Africa’s carbon credit involvement. Some African leaders argue that wealthy nations are offloading their climate responsibilities onto the Global South under the guise of carbon offsets. There is concern that carbon credit projects could become a modern form of green colonialism if not properly regulated. If Africa is to benefit from its environmental assets, it must set the terms of engagement, not merely serve as a carbon sink for industrialised nations.
The road ahead for Africa’s carbon credit economy is paved with both opportunity and risk. If managed effectively, carbon credits could generate substantial revenue, promote conservation, and fund local development. According to the ACMI, unlocking even just 300 million credits annually by 2030—a realistic goal—could support 10 million jobs on the continent. However, this will require African governments to invest in monitoring systems, pass clear laws, and foster transparency. It will also require the international community to ensure fairness in pricing and partnerships.
Overall, green may indeed be the new gold for Africa, but only if the continent owns the mine. The emerging carbon credit economy holds the promise of turning Africa’s forests, grasslands, and renewable energy assets into real financial capital. However, this promise will only be fulfilled if carbon trading mechanisms are constructed with integrity, inclusion, and equity at their core. Africa’s role must evolve beyond simply being a passive supplier of credits to becoming an architect of the global green economy.
