Experts have raised alarm over the worsening ecological damage caused by climate change and its impact on countries with high debt burdens, creating a dangerous and interconnected cycle.
Financial experts, Non-Governmental Organizations (NGOs), and other relevant stakeholders gathered at Heinrich Boll’s conference on Nigeria’s debt, development, and climate challenges in Abuja on Wednesday.
During the conference, there were calls for a review of the global financial architecture, focusing on institutions like the World Bank and the International Monetary Fund (IMF).
The experts advised the Nigerian government to take steps to reduce foreign commercial loans, establish specific debt performance auditing mechanisms, and enhance public borrowing transparency and accountability to avoid accumulating unsustainable debt.
In his keynote address, Sanusi identified several issues currently facing Nigeria, including rising inflation, increasing public debt, and low external reserves.
He also highlighted how climate change contributes to the farmer-herder conflict in Nigeria, where limited financial resources hinder private sector engagement.
Amara Ekeruche pointed out that Nigeria’s rising public debt is linked to the shift from bilateral debts to private and multilateral debts over the years. Private debts, with short tenors and higher interest rates, have led to soaring interest payments as a share of public revenue in the last decade.
David Ugolor emphasized the importance of adhering to Nigeria’s Debt Management Strategy 2020-2023, which outlines guidelines for borrowing activities in line with the funding structure of the Medium-Term Expenditure Framework (MTEF).
He also mentioned various multilateral financing architectures, such as the Debt Service Suspension Initiative (DSSI), G20 Debt Initiative, and more.
Jason Braganza expressed concern about the lack of significant reforms in the debt architecture, as market behavior, credit rating agencies, arbitration, and mediation mechanisms continue to contribute to the indebtedness of vulnerable African countries.
Sadiq Okoh highlighted the physical and transition risks of climate change in Nigeria, such as significant financial losses due to flooding and reduced crop yields. Access to water remains a challenge for 45% of the Nigerian population.
The experts recommended that Nigeria’s debt assessment includes considering contingent liabilities and Ways and Means while adhering to the debt ceiling.
They also called for promoting blended types of investments to create more job opportunities and suggested a new debt movement to prevent financial resources from being looted and leaving the continent.
The conference featured financial experts and executives of NGOs, including the former governor of the Central Bank of Nigeria, His Royal Highness Malam Sanusi Lamido Sanusi, who delivered the keynote address, and representatives from various research and advocacy organizations.