At the United Nations biodiversity conference, CBD COP17, the African Development Bank Group launched the second phase of its Mainstreaming Natural Capital in Africa’s Development Finance project, known as NC4-ADF II. The initiative seeks to help 13 sub-Saharan African countries measure their natural assets and incorporate that information into economic planning, public budgeting and investment decisions. Its central ambition is to ensure that Africa’s natural wealth is recognised not merely as an environmental resource but as an essential component of economic development.
The African Development Bank (AfDB) launched NC4-ADF II in Addis Ababa on 8 October 2026, supported by a US$4.23 million grant from the African Development Fund’s Climate Action Window. Running from October 2026 to September 2029, the project aims to move natural capital accounting beyond technical data collection towards practical policy influence, connecting ecosystem information with national development plans, public budgets and investment decisions.
READ ALSO: Nature-Based Enterprises: Unlocking Africa’s Green Investment Potential
The initiative covers Burundi, Cameroon, the Central African Republic, Côte d’Ivoire, the Democratic Republic of Congo, Ghana, Kenya, Mozambique, Rwanda, Tanzania, Togo, Zambia and Zimbabwe. It is being implemented by the Africa Natural Capital Accounting Community of Practice alongside the AfDB’s African Natural Resources Management and Investment Centre, with technical support from AUDA-NEPAD, GIZ, UNECA, UNEP and WWF. Innocent Onah, the AfDB’s Chief Natural Resources Officer and project task manager, described it as “the next chapter in Africa’s NCA journey” and “a step change in how Africa approaches natural capital”.
Gross domestic product (GDP) measures economic activity over a given period but does not adequately account for the depletion of forests, fisheries, soils and water systems that support production. The AfDB estimates that Africa’s natural capital was worth US$7.6 trillion in 2020, yet much of this wealth remains insufficiently reflected in conventional national economic assessments.
Natural resources and ecosystem services contribute approximately 60 per cent of the continent’s GDP, while nature-based sectors account for nearly two-thirds of employment in many African countries. An earlier estimate placed Africa’s measured natural capital at approximately US$6.2 trillion in 2018. This disconnect, often described as being “nature rich but cash poor”, means governments can record economic growth without adequately accounting for the natural assets being depleted in the process.
The African Development Fund’s Board approved the US$4.23 million grant in August 2026. Additional in-kind contributions from partner institutions bring the project’s total estimated cost to approximately US$4.92 million. The funding comes through the Climate Action Window’s Adaptation Sub-window. Although modest relative to the scale of the environmental and economic challenges involved, the grant is intended to support enabling activities, including policy development, technical assistance, statistical readiness assessments, biodiversity financing tools and pilot initiatives. It is not designed as direct financing for large-scale ecosystem protection or restoration.
NC4-ADF II has established measurable targets to assess its progress. These include increasing the number of natural resource-based satellite accounts produced from a baseline of 14 to 3,928 by 2029, appraising 15 public investment projects using tools developed or promoted by the initiative, up from a baseline of two, influencing five resilient resource-based policies and tracking US$100 million in biodiversity finance. These indicators reflect the project’s central objective: natural capital accounts should not simply be produced but actively used to influence public policy, investment priorities and development decisions.
Mahlodi Tau, Chair of the Africa Natural Capital Accounting Community of Practice, emphasised this distinction, stating: “Producing accounts is not the end goal. The real value of natural capital accounting lies in its use. We want to see the natural capital evidence informing development planning, policy, budgeting, finance and investment”. The third Africa Policy Forum on Natural Capital, held in Addis Ababa from 6–7 October 2026 under the theme “From Accounts to Policy”, brought together government officials, statisticians, development partners and academics to examine how ecological data can be integrated into the work of finance ministries and national planning institutions.
Kenya’s experience illustrates the time and institutional commitment required to establish natural capital accounting systems. James Thuo of the Kenya National Bureau of Statistics described a 14-year process that led to the integration of a Physical Energy Flow Account into national accounting, enabling the country to assess economic activity alongside the movement and use of natural resources.
South Africa’s National Natural Capital Accounting Strategy, launched in June 2021, has similarly advanced the integration of biodiversity and environmental information into national economic and environmental decision-making. These examples demonstrate that institutionalising natural capital accounting is achievable, but requires sustained investment, technical capacity and coordination across government institutions.
The NC4-ADF II launch also coincides with wider efforts to expand biodiversity financing under the framework of CBD COP17 in Yerevan, Armenia. On 20 October 2026, the AfDB, the Foundation for Parks and Reserves of Côte d’Ivoire and West African biodiversity trust funds launched a protected-area-indexed bond designed to mobilise approximately €300 million from capital markets for conservation. Al-Hamndou Dorsouma, Head of the AfDB’s Climate and Green Growth Division, explained the need for such instruments, stating: “Public budgets and donations remain essential as funding tools, but they will not be enough. We must mobilise additional resources and develop innovative instruments capable of attracting long-term private and institutional capital”.
Paolo Augusto, Principal Economist at Landscape Alliance, described the disconnect between Africa’s natural wealth and conventional economic measurements as the “Africa paradox”. The AfDB’s concept note on green wealth argues that properly valuing natural assets could improve access to financial resources by enabling credit assessments to reflect a country’s broader asset base. This could potentially strengthen national risk profiles and expand opportunities in green bond markets. The note estimates that Africa requires US$250 billion annually by 2030 to implement its Nationally Determined Contributions but receives approximately US$29.5 billion each year. Better natural capital accounting could help address part of this financing challenge by providing more credible evidence for nature-positive investment.
However, the project’s objectives also highlight an important limitation: natural capital accounting is a decision-making tool, not a substitute for political commitment, environmental regulation or effective enforcement. Better information cannot protect forests, fisheries or other ecosystems where environmental laws are poorly implemented, public institutions lack resources or competing economic interests take precedence.
Valuation also presents methodological challenges, as monetary estimates may fail to capture the full cultural, social and ecological importance of natural assets. For this reason, accounting systems must combine financial assessments with physical indicators, including habitat coverage and ecosystem condition, rather than assume that damage to one natural asset can always be compensated for by protecting another.
The most meaningful measure of NC4-ADF II’s success will therefore be whether national planning and finance ministries use natural capital information to change development decisions. Relevant indicators include the production and regular updating of accounts, their application in public budget decisions, improved monitoring of protected areas and inland fisheries, and the development of national teams capable of maintaining these systems beyond the project’s lifespan. Transparent methods and accessible data will also be essential to ensuring public accountability.
The US$4.23 million grant is modest compared with the estimated US$7.6 trillion value of Africa’s natural capital, but its potential significance lies in the policy changes it could support across the 13 participating countries. If the initiative succeeds in embedding natural assets into national budgets, investment appraisals and development strategies, its impact will be measured not simply by the accounts produced or money disbursed, but by the decisions it helps governments make. As Onah observed, the objective is “turning evidence into action”.
