African Development Fund Backs Natural-Capital Planning Across 13 Countries With $4.3 Million Grant

The African Development Fund has approved a $4.3 million grant to strengthen the integration of natural capital into policy and development planning across 13 African countries.

The project is scheduled to run from October 2026 to September 2029 and is expected to support improvements in policy, statistics, institutions and knowledge systems.

The central idea is that forests, wetlands, soils, water systems and other natural assets should be measured and incorporated into economic decision-making rather than treated as invisible resources outside national accounts.

Moving beyond GDP alone

Traditional economic statistics capture the value of goods and services produced, but often fail to reflect the depletion or protection of natural assets.

The African Development Bank has argued that this creates an incomplete picture of national wealth. Its project appraisal work notes that including the value of carbon sequestration by African forests could have raised the continent’s measured GDP by an estimated $66.1 billion in 2022.

That does not mean natural assets can simply be added to GDP without methodological debate. It does show why governments and development institutions are paying greater attention to environmental-economic accounting.

Why natural-capital data matters

Better data can influence land-use planning, infrastructure decisions, agriculture, conservation and climate finance. It can also help governments identify where economic growth is being achieved by degrading the natural systems on which future production depends.

For finance ministries, the challenge is to connect environmental statistics with public investment and fiscal policy. For statistical agencies, it means developing credible methods and consistent datasets. For development banks, it creates the possibility of assessing projects against a broader measure of national wealth.

Potential implications for financing

Natural-capital accounting may also affect how countries present their economic assets to investors and credit-rating agencies. Supporters argue that countries with substantial forests, biodiversity and carbon-storage capacity are often undervalued in conventional financial analysis.

However, better valuation will not automatically improve credit ratings or attract capital. Governments will still need transparent institutions, credible data and safeguards that prevent natural assets from being monetised without fair community benefit.

A three-year implementation test

The project’s value will depend on whether participating countries move from training and reports to practical changes in national planning.

Indicators of progress should include stronger environmental-economic statistics, use of natural-capital data in budget and infrastructure decisions, institutional coordination and public access to the resulting information.

The wider question is whether Africa can build development models that recognise natural wealth before it is depleted, rather than calculating the cost only after ecosystems have been damaged.

References

• African Development Bank: Mainstreaming Natural Capital in Africa Development Finance Project, Phase 2
• African Development Bank: Making better use of Africa’s natural capital