Leveraging digital financial innovations to mitigate climate vulnerabilities in Africa
Africa remains one of the most climate-vulnerable continents, with its economies heavily reliant on climate-sensitive sectors such as agriculture, water resources and energy. The growing frequency and intensity of climate shocks pose significant challenges to economic resilience, particularly in reg...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2025-12-01
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| Series: | Cogent Social Sciences |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23311886.2025.2540422 |
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| Summary: | Africa remains one of the most climate-vulnerable continents, with its economies heavily reliant on climate-sensitive sectors such as agriculture, water resources and energy. The growing frequency and intensity of climate shocks pose significant challenges to economic resilience, particularly in regions with limited adaptive capacities. This study investigates the role of digital financial innovations, measured through digital payment services, in mitigating climate vulnerabilities across the continent. Panel data from 41 African countries over the years 2014, 2017 and 2022 were analyzed using fixed effects estimation. The results indicate that increased usage of digital payment services is significantly associated with reductions in climate vulnerability, particularly in East and Central Africa and in low-income countries, where digital tools appear to fill critical financial access gaps. These findings highlight the potential of digital finance as a transformative mechanism for building climate resilience. However, the analysis is constrained by non-annual data availability and potential endogeneity concerns, despite robustness checks. Future research should explore longitudinal impacts, institutional quality and household-level mechanisms to deepen understanding of digital finance’s role in climate adaptation. This study contributes to policy debates on climate finance, digital inclusion and resilience by offering evidence-based insights for targeted and context-specific interventions. |
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| ISSN: | 2331-1886 |