CBG: Ghana Land Disputes Hinder Climate Financing for Nature Projects

• Land ownership disputes and inadequate documentation are hindering the financing of nature-based climate projects in Ghana.
• Eva Ackuaku, Head of Sustainable Financing and Impact at Consolidated Bank Ghana, identified these significant challenges.
• The difficulties are particularly acute in communities with complex family land ownership arrangements.
• These issues complicate due diligence for financial institutions, making it harder to support vital environmental initiatives.

Without clear title and undisputed ownership, the risks associated with long-term investments in land-dependent projects become prohibitively high for financial entities.

Financial institutions in Ghana are encountering significant difficulties in providing support for nature-based climate initiatives, a challenge primarily stemming from prevalent land ownership disputes and insufficient documentation. Eva Ackuaku, who leads Sustainable Financing and Impact at Consolidated Bank Ghana (CBG), recently articulated these impediments, emphasizing their impact on the nation's environmental goals. Her remarks underscore a critical barrier to the advancement of Ghana's environmental sustainability efforts, particularly those reliant on natural solutions for climate mitigation and adaptation, such as reforestation or ecosystem restoration projects.

The issues identified by Ackuaku directly impact the viability and attractiveness of potential projects for investors and lenders. Without clear title and undisputed ownership, the risks associated with long-term investments in land-dependent projects become prohibitively high for financial entities. This situation creates a significant bottleneck for the flow of capital into crucial environmental efforts across the nation, hindering the development of projects that could otherwise contribute substantially to Ghana's climate resilience and green economy.

A significant portion of these challenges is rooted in Ghana's traditional land tenure systems, particularly in communities where land is held under complex family ownership arrangements. These intricate structures often involve multiple stakeholders and customary laws that may not always align with the formal documentation requirements of modern financial institutions. The lack of standardized, easily verifiable records for such land parcels complicates due diligence processes for banks like Consolidated Bank Ghana, making it arduous to ascertain legitimate ownership and rights.

The absence of clear land titles or comprehensive documentation makes it difficult for financial institutions to establish collateral, assess project risks accurately, and ensure the long-term security of their investments. This uncertainty deters potential financing for projects that could otherwise offer substantial environmental and economic benefits, such as those focused on sustainable land management or biodiversity conservation. Navigating these traditional ownership models alongside contemporary financial regulations presents a unique and persistent hurdle for Ghana's climate finance landscape, impacting the ability to scale up vital initiatives.

The ongoing difficulties in securing financing for nature-based climate projects due to land-related issues have profound implications for Ghana's broader environmental agenda and its commitments to global climate action. As the nation seeks to implement sustainable financing strategies and leverage its natural assets for climate resilience, the inability to effectively channel funds into these initiatives represents a major setback. The statements from the Head of Sustainable Financing and Impact at CBG highlight a systemic problem that requires concerted effort from policymakers, traditional authorities, and financial sector stakeholders to resolve.

Addressing these foundational issues of land documentation and dispute resolution is paramount for unlocking the full potential of Ghana's nature-based climate projects. Without robust frameworks that clarify land ownership and streamline documentation, the ambition to attract significant investment into sustainable development and climate action will remain severely constrained. This situation underscores the critical need for improved land governance to facilitate the flow of capital necessary for a resilient and sustainable future in Ghana, ensuring that promising environmental projects can secure the necessary financial backing.

Lawyers advising on climate project financing or land transactions in Ghana must prioritize thorough due diligence on land ownership and documentation, particularly in communities with complex family tenure systems, to mitigate financing risks and ensure project viability.

Source: Original reporting via a banking executive's statement.