2024 was a year of climate change impacts that have increased in extremes with grim economic impacts. The World Meteorological Organization’s (WMO) latest report on the state of the global climate confirmed that 2024 was likely the first calendar year to be more than 1.5°C above the pre-industrial era.
With record-breaking temperatures, escalating sea levels, and devastating weather events, financial losses have soared to unprecedented levels.
According to the report, the extreme weather events led to the highest number of displacements recorded in over a decade, severely impacting economies. In Africa, for instance, Southern Africa faced devastating losses from Cyclone Gamane, which left parts of Mozambique, Madagascar, and Malawi underwater, displacing thousands and causing billions in damages.
Moreover, the climate change induced prolonged drought in the Horn of Africa severely affected the agricultural sector, a major economic driver, as farmers saw reduced yields leading to increased import dependency and straining the national budget.
Intensified food shortages, led to economic instability in countries such as Ethiopia, Somalia, and Kenya. For instance, Kenya’s total food import bill was approximately $2.065 billion.
Besides, real estate and infrastructure did not survive the damage as a result of extreme climate events. Kenya and Tanzania experienced catastrophic floods, with major cities like Nairobi and Dar es Salaam suffering infrastructural damage and economic losses.
Nigeria’s northeastern city of Maiduguri experienced the worst flood in 30 years, putting half the city under water and affecting over one million people. Moreover, erosion and flooding in most coastal cities such as Lagos have led to property devaluation, making real estate investments in these areas increasingly risky.
These losses have put the insurance under pressure. The limited penetration of insurance across Africa does not help matters either as many are left without financial protection against climate disasters. Additionally, where coverage exists, the increased risk assessment has informed the rising premiums, making policies unaffordable for many.
The strain has caused national economic fallout in most countries. Countries reliant on agriculture and tourism, such as Kenya and Tanzania, have seen reduced revenue due to climate disruptions, and governments are diverting billions toward emergency relief and infrastructure repair, affecting resources needed for healthcare, education, and economic development.
The WMO report highlights that the financial toll of inaction far outweighs the cost of climate adaptation strategies. WMO Secretary-General Celeste Saulo says that investment in early warning systems and improving the existing ones could prevent massive economic losses and save lives in cases of severe climate change impacts.
“WMO and the global community are intensifying efforts to strengthen early warning systems and climate services to help decision-makers and society at large be more resilient to extreme weather and climate. We are making progress but need to go further and need to go faster. Only half of all countries worldwide have adequate early warning systems. This must change,” says Celeste Saulo.
Also, Investment in climate-resilient infrastructure can protect communities from extreme weather impacts and prevent costly post-disaster repairs. Moreover, transitioning to climate-smart farming and expanding renewable energy access can enhance food security and economic resilience, reducing dependency on fossil fuels and imported food.
The WMO’s findings indicate that the economic costs of climate are an immediate reality for Africa. Consequently, governments, businesses, and individuals must recognize that investing in adaptation and mitigation is a financial imperative as much as an environmental necessity.
