Enabling private sector adaptation to climate change in sub‐Saharan Africa

Abstract

AbstractThe private sector is increasingly recognized as having important potential to help society adapt and become more resilient to climate change. Yet there is limited research examining how to promote and facilitate private sector adaptation in developing countries and in particular how governments can create an enabling environment to stimulate and incentivize domestic private sector adaptation. In this paper, we address this gap through a review of the key factors required to provide an enabling environment for the private sector denoted by existing adaptation literatures. We do this with a focus on adaptation by small and medium enterprises (SMEs) in sub‐Saharan Africa (SSA). To advance this review, we draw insights from a much larger, yet generally independent, literature on enabling environments for private sector development. This literature disaggregates the private sector and highlights key constraints to the development and growth of SMEs in SSA, including deficient infrastructure and evidence of an African gap in access to and use of finance. Both areas of scholarship are then combined in a framework identifying key “building blocks” constituting enabling conditions for private sector adaptation. The framework could be applied in many ways including to focus strategies to enhance private sector adaptation and to identify trade‐offs and interactions between policies or initiatives surrounding private sector development. By combining these literatures, we call for a more holistic approach to develop enabling environments for SME adaptation and climate resilient development that addresses the broader structural deficits that condition vulnerability and barriers that limit adaptive capacity.This article is categorized under: Vulnerability and Adaptation to Climate Change > Institutions for Adaptation