Poorer Cities Await Money From Rich World’s $100 Billion Climate Pledge (Bloomberg)
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In the early hours of Aug. 14, 2017, a deafening boom pierced through Sugarloaf mountain on the outskirts of Sierra Leone’s capital Freetown. After days of torrential rain, the hill had collapsed. Large boulders crushed houses and torrents of mud swallowed anything in its way. The mudslide claimed 1,141 lives, making it the country’s worst natural disaster in recent history.
The tragedy — a result of extreme flooding compounded by deforestation — made Yvonne Aki-Sawyerr determined to reform public policies around climate mitigation and adaptation. After successfully running for mayor as an opposition candidate in 2018, she proposed a series of initiatives, including planting one million trees in two years.
But those measures weren’t enough to prevent the tragedy from repeating itself. In August this year, a landslide killed at least eight people in Freetown and displaced hundreds. With the city’s population doubling over the last 20 years, over 70 informal settlements have sprouted across the city, many of which are built on the once-luscious hills. Increasingly frequent cyclones and floods make these disaster-prone areas particularly dangerous.
“I have seen families torn apart, heartbroken, devastated by incident after incident, nothing making international news, but literally crushing people,” Aki-Sawyerr said.
Aki-Sawyerr’s dilemma is symptomatic of the broader woes around the $100 billion climate finance pledge by rich nations in 2009 to help poor countries mitigate and adapt to climate change — there’s no agreement on how to spend the funds, and the meteoric figure rings hollow at municipalities.
The $100 billion target is a key benchmark for November’s United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt, but mayors fret that the financing gap will be particularly detrimental to cities — which receive 70% of the world’s refugees, internally displaced persons and stateless people, according to a report by the UN High Commission for Refugees.
Cities are at the bottom of the pecking order when loans and grants — which make up the bulk of the $100 billion — get disbursed. Whether transferred bilaterally between countries or through multilateral development banks, the money makes its first stop at recipient countries’ finance ministries, then to other central agencies before finally reaching municipalities, according to Michael Cohen, a World Bank veteran who is now the director of public policy at The New School in New York City.
“The national governments don’t give municipalities the money when they need it,” Cohen said.
When the money does trickle down to city level, there’s little flexibility on how to spend it. Around 80% of central government transfers to cities are non-discretionary funds, which means that they are earmarked for particular spending priorities, according to a report by the World Observatory on Subnational Government Finance and Investment, an initiative launched by the Organisation for Economic Co-operation and Development and umbrella group United Cities and Local Governments.
Cities are increasingly seeking funding from private donors. In 2021, Freetown received $174,000 from the Global Cities Fund for Migrants and Refugees, an initiative by the Mayors Migration Council with funding from the Conrad N. Hilton Foundation, the IKEA Foundation, Open Society Foundations and the Robert Bosch Stiftung.
Aki-Sawyerr was among the 15 winners of Bloomberg Philanthropies’ Global Mayors Challenge this year for her proposal to tackle deforestation by using digital technologies to support tree maintenance. Winners receive $1 million to implement the projects over three years.
Bloomberg Philanthropies founder Michael Bloomberg is the majority owner of Bloomberg LP, the parent of Bloomberg News.
“We work with international donors and transfer the funds directly into the bank account of the cities,” Samer Saliba, Mayors Migration Council’s head of practice said. “There’s no interim in terms of the national governments having a say in how that money is spent.”
Last month, Aki-Sawyerr was charged with obstruction of police duty following following the arrest of one of her aides. This episode follows a series of investigations into her by the Anti-Corruption Commission, the Public Accounts Committee in Parliament and the Ministry of Local Government and Rural Development this year.
“I think it would be true to say I’m the most investigated elected official in the country,” Aki-Sawyerr said in an email to Bloomberg.
The ruling Sierra Leone People’s Party and Aki-Sawyerr’s opposition All People’s Congress party will contest in elections in 2023. APC has called the investigation a political witch hunt and an attempt to harass and intimidate Aki-Sawyerr.
The Sierra Leone government didn’t immediately respond to a request for comment.
When cities try to access financing, they often face layers of systemic barriers. On the local level, city governments lack the capacity to prepare projects that are financially attractive to investors. Nationally, central governments often restrict cities’ borrowing power. Internationally, most financial investment mechanisms require national sovereign guarantees or high levels of credit worthiness that cities in low-income countries, including Freetown, rarely have.
“I think it’d be quite a leap for multilateral banks to work directly with cities,” Cohen said. “There’s a hesitancy to give money to the local governments because most aren’t financially solvent.”
The World Bank estimates that only 4% of the 500 largest cities in developing countries are deemed creditworthy in international financial markets. But Aki-Sawyerr argues that the perception of cities being uncreditworthy is both wrong and dangerous.
“We don’t have a capacity challenge. The government has a control challenge, and it comes down to resources,” Aki-Sawyerr said.
Following the August landslide, Aki-Sawyerr walked along a steep, narrow footpath for 15 minutes before reaching the disaster site as there was no motorable road. She knows that to prevent houses from being built in hazard-prone locations, Freetown needs to be able to issue its own building permits.
“Over 35% of my residents live in informal settlements, either on the hillside, which are incredibly dangerous and difficult to access, or they’re along the coastlines, destroying mangroves and building into the waterway,” she said.
Having no autonomy over permits also means Aki-Sawyerr is deprived of an important source of revenue. When she came into office in 2018, Freetown’s city revenue was $1.25 per capita per year. Today, it has reached almost $4, thanks largely to donor funding. But she knows in order for Freetown to stand on its own two feet, it can’t rely on fundraising.
“Cities can be constrained, restrained and prevented from fulfilling their potential,” she said. “If you can grow capacity in a government, why can’t you grow capacity in a city?”
