By Faridat Salifu
Nigeria is exploring new financing mechanisms to help smallholder farmers withstand climate change, with a proposed investment plan targeting up to $1 billion in its first expansion phase.
Managing Director of YAPU Solutions, Christoph Junghleisch, disclosed this at a Taxonomy Validation Workshop on Adaptation and Resilience Solutions organised by the Presidential Implementation Committee on Technology Transfer (PICTT) in collaboration with YAPU Solutions.
Junghleisch said the partners were developing a framework to connect climate adaptation solutions with financing, with an initial pilot potentially worth between $100 million and $200 million.
He clarified that the figures were targets and did not represent confirmed funding commitments.
The initiative comes amid growing concerns over the different climate risks confronting farmers, including drought in northern Nigeria and flooding and waterlogging in southern communities.
Country Representative of WorldFish in Nigeria, Dr Charles Nyangbe, said the country needed financing instruments tailored to these varying challenges to help farmers protect their livelihoods and sustain agricultural production.
He advocated index-based insurance and blended finance, alongside mechanisms that would enable commercial banks and other financial institutions to lend to farmers using public funds as guarantees.
“Government should come up with an envelope of funding that is targeted at climate financing, give it to financial institutions, give it to commercial banks so that they can lend,” he said.
Nyangbe said Nigeria had attracted about $2.5 billion in climate-related financing, but the amount remained significantly below estimated requirements.
He also called for climate finance to cover livestock, fisheries and aquaculture, noting that flooding could destroy fish ponds and aquaculture facilities, causing substantial losses.
PICTT Chairman, Dr Dahiru Mohamed, said the committee was working to make Nigeria’s national taxonomy operational and accessible to rural communities.
The taxonomy, being developed by the Federal Ministry of Finance and the United Nations Development Programme (UNDP), defines activities eligible for climate finance.
Mohamed said the implementation framework would help identify adaptation and resilience activities that qualify for financing, making it easier to direct resources towards farmers facing climate-related risks.
“Having a national taxonomy is good, but without defining which activity qualifies as adaptive or resilient to climate change, there is no way you can access the financing,” he said.
He also called for collaboration among federal, state and local governments to tackle climate-related challenges, particularly flooding, through improved infrastructure and mitigation measures.
Junghleisch said digital technology would be central to the proposed financing system, allowing funds reaching smallholder farmers to be documented and transactions audited to improve transparency and accountability.
He added that YAPU Solutions was engaging development finance partners, including the Bank of Agriculture and the African Development Fund, while seeking private-sector investment.
He stressed that appropriate government policies, legislation and regulations would be necessary to attract investment, as public funding alone could not meet the scale of financing required.
The workshop brought together financial institutions and agricultural experts to validate the taxonomy, identify suitable financing instruments and establish an implementation timeline.
The proposed framework is expected to improve access to climate finance for vulnerable farming communities, although its investment targets are yet to be confirmed.
