ActionAid International Global Lead on Climate Justice, Teresa Anderson (left), and ActionAid Country Director, Bavon Christopher, who highlighted debt as a major but solvable barrier to climate action and noted that government support favours industrial agriculture, leaving limited resources for agroecological farming systems.
By Daniel Mumo Kioko
Tanzania has allocated funding for just 0.9 percent of its domestically financed climate commitments, despite spending 711 times more on debt repayments than on climate action, according to a new report by ActionAid.
The findings highlight how mounting debt obligations are limiting the country’s ability to finance measures aimed at addressing climate change, even as vulnerable communities face growing climate-related challenges.
The figures are contained in Debt Fuels the Climate Crisis: How the Finance Flows, ActionAid’s fourth annual report on the subject, published in September 2026. Compiled in collaboration with Development Finance International, the report examines how debt repayments are constraining climate spending in countries most vulnerable to climate change.
Under the Paris Agreement, countries are required to submit Nationally Determined Contributions (NDCs), which outline their commitments to reducing greenhouse gas emissions and adapting to climate change.
Many countries divide their NDCs into two components: unconditional commitments, which governments pledge to finance using domestic resources, and conditional commitments, which depend on financial and technical support from international partners.
However, the report finds that even commitments governments have promised to finance themselves remain significantly underfunded.
Tanzania’s unconditional climate commitments are estimated to cost $918 million, but the government has allocated funding for only 0.9 percent of that amount.
The situation is comparatively better in Malawi, where 10.3 percent of unconditional commitments have been budgeted, Sierra Leone at 12.3 percent and Bangladesh at 3.9 percent.
Across 25 climate-vulnerable countries with sufficient data, only about a quarter of the total costs of unconditional climate commitments have been covered by government budgets, with just four countries allocating sufficient resources.
Teresa Anderson, ActionAid International’s Global Lead on Climate Justice, said the findings, particularly Tanzania’s low allocation, were unexpected.
“We assumed we were going to find that unconditional NDCs had been budgeted for,” she said, describing Tanzania’s results as “a real surprise”.
The funding gap is further illustrated by the country’s debt obligations, which the report says are significantly higher than its climate expenditure.
According to the report’s annex data, Tanzania is expected to spend approximately $5.9 billion on servicing domestic and external debt in 2026, compared with only about $8 million allocated to climate action.
This means debt servicing is 711 times higher than climate spending, raising questions about the country’s capacity to finance its climate commitments while meeting its financial obligations.
Tanzania is not alone in facing this challenge.
Across climate-vulnerable countries, governments spend nearly 25 times more on debt servicing than on climate action. The report estimates that debt repayments consume about 65 percent of national revenues in these countries.
It further notes that 93.5 percent of the countries assessed are either already experiencing debt distress or are at high risk of falling into it.
The situation is particularly pronounced in Senegal, where debt servicing exceeds climate expenditure by more than 600 times. Mozambique spends 117 times more on debt repayments than on climate action, while Malawi’s debt payments amount to 129 percent of its revenue, partly because some debt obligations are financed through new borrowing.
The report also highlights the wider imbalance in global financial flows.
It estimates that developing countries in the Global South paid approximately $8.8 trillion in debt repayments in 2026, compared with about $39 billion provided by wealthy countries in grant-based climate finance.
This represents a gap of roughly 225 times, underscoring the disparity between the financial resources developing countries must commit to debt repayments and the support available to address climate change.
Agriculture funding under pressure
In Tanzania, the consequences of limited climate financing are also reflected in the agricultural sector, where funding priorities remain a concern.
The country adopted the National Ecological Organic Agriculture Strategy in 2023 to promote sustainable farming practices that rely on natural fertilisers, locally adapted seeds and healthy soils while reducing dependence on imported agricultural chemicals.
However, Bavon Christopher, ActionAid Tanzania’s Country Director, says government support continues to favour industrial agriculture, with limited resources reaching agroecological farming systems.
“We’ve seen there is a lot of funding flowing into industrial agriculture, and nothing is being spent in agroecology,” he said, adding that agricultural subsidies largely support synthetic fertilisers and imported seeds.
A 2024 ActionAid assessment covering four countries, including Tanzania, found that less than half of agricultural budgets, on average, were allocated to activities aligned with agroecology.
Christopher argues that debt obligations further complicate efforts to redirect agricultural investment towards sustainable and locally driven food systems.
He explained that governments need foreign currency to service external loans, creating pressure to prioritise export-oriented industrial agriculture over farming systems designed primarily to strengthen domestic food security.
He also pointed to cases of land acquisition that can undermine local communities’ access to productive agricultural resources.
Agroecology offers an alternative
Despite the financing challenges, ActionAid’s research across 10 countries points to the potential of agroecology to improve agricultural productivity while reducing farmers’ production costs.
In Tanzania, the study found that yields of pigeon peas and sorghum almost tripled among farmers using agroecological practices.
The report also highlights the experience of Zawadi Josephat, a young farmer at Makiingi Youth Hub, who significantly reduced her production costs after adopting indigenous seeds, organic manure and natural pest-control methods.
Her costs fell from $134 to $36 per acre, demonstrating how locally available resources and sustainable farming practices can reduce farmers’ dependence on expensive agricultural inputs.
“I am confident I will make a significant profit because my production costs have been much lower than in previous years,” she said in the report.
The findings suggest that investing in agroecology could offer farmers an opportunity to improve productivity, strengthen resilience to climate change and reduce reliance on costly imported inputs.
However, ActionAid argues that scaling up such approaches requires governments to address the financial constraints that limit investment in climate-resilient agriculture.
Calls for debt relief
To address the financing gap, ActionAid is calling for reforms to the international debt system, arguing that debt cancellation could provide climate-vulnerable countries with the financial space needed to implement their climate commitments.
Anderson said cancelling the debts of climate-vulnerable countries could generate resources equivalent to six times the funding required to implement their unconditional climate plans.
The organisation is also proposing an automatic five-year suspension of debt repayments following major climate disasters, allowing affected countries to redirect resources towards recovery and rebuilding.
It further recommends that external debt repayments should not exceed 10 percent of a country’s national revenue, to prevent debt obligations from undermining essential public investments.
Beyond these measures, the report supports the establishment of a United Nations convention on sovereign debt, an initiative being championed by the African Union.
Anderson said the proposal could gain momentum at next year’s United Nations General Assembly, providing an opportunity to strengthen international rules governing sovereign borrowing and debt restructuring.
For Tanzania and other climate-vulnerable countries, the debate is increasingly about how to balance debt obligations with the need to invest in climate resilience, sustainable agriculture and long-term development.
“Debt is a major but fixable barrier to climate action,” she said.