CDM in sub-Saharan Africa and the prospects of the Nairobi Framework Initiative

To what extent can capacity-building activities under the Nairobi Framework (NF) Initiative overcome barriers to the Clean Development Mechanism (CDM) in sub-Saharan Africa and, in particular, the East African region? The level of CDM penetration into sub-Saharan Africa is compared with CDM market trends globally. The relatively low CDM penetration in sub-Saharan Africa and the East African Community (SSA/EAC) countries is a result of endogenous barriers, particularly the inadequate general investment climate, the low level of industrialization of many countries, and the lack of CDM capacity, particularly with regard to institutional infrastructure. To assess these barriers, case studies were conducted in Rwanda and Uganda, while South Africa was taken as a reference case since it has - in the context of sub-Saharan Africa - a relatively well-developed CDM business. The NF Initiative, which was developed to deal with the lack of CDM capacity in Africa, cannot address the general investment climate of host countries or their economic structure as these are beyond its scope. Nor does the NF address investors' perceptions of the investment climate, but instead focuses its capacity-building efforts on HRD (human resource development; i.e. training courses) rather than on institutional questions, thereby failing to address some of the real issues at stake.