Imperatives for Nigeria’s Access to Climate Finance

By Faridat Salifu

As the world grapples with the escalating impacts of climate change, developing nations like Nigeria face the dual challenge of mitigating environmental damage while advancing their economic development.

In this context, for Nigeria, a country facing severe climate risks and a rapidly growing population, the role of climate finance in shaping a resilient future has never been more critical.

The recent discussions at COP29 in Baku, Azerbaijan, highlighted the deep disparity between the climate finance pledges made by developed nations and the actual funds delivered.

While developed countries are committed to mobilizing $300 billion annually by 2025 to support the climate efforts of developing nations, this figure still falls far short of the $1.3 to $2 trillion that experts say is needed.

Despite this, Nigeria has struggled to access even a fraction of these promised funds, with the country’s share of the $100 billion per year goal set in 2009 remaining largely unmet.

For Nigeria, which aims to meet its Nationally Determined Contributions (NDCs) and address the vast socio-economic challenges of its burgeoning population, effective climate finance is not just a matter of environmental sustainability—it is an economic necessity.

The country must mobilize upwards of $20 billion annually to meet its climate and development targets. Yet, the potential of climate finance remains largely untapped, presenting both a challenge and an opportunity for transformative growth.

Climate finance is not only about addressing the environmental risks of climate change; it is also a powerful tool to accelerate development, promote job creation, and foster economic diversification.

For Nigeria, where agriculture, energy, and infrastructure remain the backbone of the economy, targeted investments in climate-resilient development are crucial to building long-term prosperity.

Agriculture in Nigeria is vital, both as a primary source of livelihood and as a key contributor to GDP. However, the sector is extremely vulnerable to climate-related disruptions such as erratic rainfall, droughts, and flooding. Climate finance offers an opportunity to boost agricultural productivity while fostering climate resilience.

By investing in climate-smart agricultural practices, such as drought-resistant crops, improved irrigation systems, and sustainable farming techniques, Nigeria can protect its food security and reduce the risks associated with changing weather patterns.

Additionally, climate finance can support farmers with insurance products designed to safeguard against climate-induced losses, thereby ensuring both their economic security and the stability of the nation’s agricultural sector.

Nigeria’s energy sector is another area where climate finance can have a transformative impact. With vast natural resources, including solar, wind, and hydroelectric power, Nigeria has the potential to transition to a clean energy future.

However, energy access remains a significant barrier, particularly in rural areas.
Climate finance can accelerate Nigeria’s energy transition by funding renewable energy projects that provide reliable, clean power to millions.

Solar farms, wind energy projects, and hydropower initiatives are not only critical to mitigating climate change by reducing reliance on fossil fuels, but they also contribute to economic growth by powering businesses, schools, and healthcare facilities.

Increased energy access can spur job creation, improve education outcomes, and reduce the cost of living for Nigerians.

Nigeria’s infrastructure deficit presents a significant challenge to its development goals. Poorly constructed roads, buildings, and other infrastructure are often unable to withstand the increasing frequency of extreme weather events caused by climate change.

Climate finance can be leveraged to build climate-resilient infrastructure that is durable and adaptable to the effects of rising temperatures, floods, and storms.

Investing in resilient infrastructure, such as flood barriers, climate-proofed roads, and early warning systems, can protect vital assets, reduce disaster risks, and safeguard Nigeria’s development progress. By prioritizing climate resilience in infrastructure projects, Nigeria can reduce the economic costs of climate-related disasters and avoid long-term setbacks to growth.

The global transition to a low-carbon economy presents an enormous opportunity for Nigeria to diversify its economy and generate jobs.

Climate finance can help develop green industries in sectors such as renewable energy, energy efficiency, sustainable transport, and waste management.

For example, investments in renewable energy manufacturing—such as the production of solar panels and wind turbines—can create jobs in the construction, installation, and maintenance of energy systems. Similarly, the development of energy-efficient technologies can open up new markets and business opportunities in sectors ranging from construction to transport.

By fostering green industries, Nigeria can not only reduce its carbon footprint but also position itself as a leader in the global green economy.

Beyond traditional government funding, climate finance also includes innovative financial mechanisms such as green bonds, carbon credits, and climate risk insurance. These instruments offer new ways to attract private sector investment into climate action.

Green bonds, for example, are increasingly being used by governments and corporations to raise funds for environmental projects. Nigeria can harness such instruments to finance large-scale renewable energy projects, sustainable agriculture programs, and climate-resilient infrastructure.

Additionally, carbon credit markets offer a way to generate revenue while reducing emissions, creating further economic opportunities for Nigeria as part of the global effort to combat climate change.

For Nigeria to fully capitalize on the potential of climate finance, several steps must be taken. The government must prioritize climate finance in its national development plans and work to create a conducive environment for investment.

This includes improving transparency in the allocation and utilization of climate funds, building the capacity of local institutions to manage climate projects, and fostering greater collaboration between the public and private sectors.

International partners also have a critical role to play in ensuring that climate finance reaches the most vulnerable nations. While the commitment to mobilize $300 billion annually is a step forward, developed nations must fulfill their pledges in full and ensure that funds are allocated effectively.

Nigeria must also work closely with international financial institutions and climate-focused organizations to tap into global financial flows and unlock the full potential of climate finance.
In conclusion, climate finance holds the key to Nigeria’s sustainable development.

By channeling investments into climate-smart projects, Nigeria can not only address the immediate impacts of climate change but also create new economic opportunities, build resilience, and set the stage for long-term prosperity.

As the country faces its most pressing challenges, harnessing climate finance will be essential in securing a greener, more resilient future for all Nigerians.

Source : Business Day