The Nigerian Government has expressed optimism that the on-going African Development (AFDB) 2023 Annual Meetings would measure to tackling climate change effects in the country and the continent.
Nigerian Finance Minister, Zainab Ahmed, said this in a statement to the Governors’ Digest, issued by the AfDB at its Annual Meetings in Sharm El Sheikh Egypt 2023.
According to Ahmed, climate finance needs in developing countries and especially in the African region, remains a huge burden on governments.
She said this was even as the extent or size of measures required in mitigating climate change and adaptation remained uncertain, largely due to paucity of data.
According to Ahmed, huge investments in infrastructure, such as green projects as mitigation steps, can best be achieved with private sector finances apart from funds sourced from development partners.
“Sub Saharan African (SSA) countries, including Nigeria, continue to bear the brunt of climate shocks that threaten to reverse hard-won development gains and undermine food production.
“Accordingly, global efforts, especially by the largest emitters, to meet carbon emission targets and avert catastrophic climate events in the future needs to be intensified.
“Nigeria looks forward to concrete proposals and commitments emerging from the forthcoming conference of the parties (COP28) in Dubai, UAE.
“This is because of the limited fiscal space. It is important to strengthen access to concessional-official and private finance for climate mitigation and adaptation in the SSA region while filling the information gap,’’ she said.
The minister also proposed that innovative financing instruments, including green bonds and debt-for-climate swaps, should be actively explored to help close climate financing gaps.
She said as global emissions are not the same across regions, and countries, there was an urgent need for a fair and just climate transition.
She said this included aligning environmental policies with labour market policies to foster re-allocations towards green job opportunities in low emission, high unemployment regions.
Ahmed said consideration could be given to sourcing funds from equity financing, concessional loans and grants from developed countries and multilateral financial institutions, issuance of bond, refinancing of debts and, lines of credit.
More so, she said, in mobilising funds for climate change financing, there was need to pay attention to social implications through appropriate policies on safety nets for the vulnerable population.
“There is also the angle of concern about monitoring Balance of Payments vulnerabilities that can arise from large capital inflows associated with climate finance.
“Africa can nevertheless, explore what has been postulated as far back as 2010; that is, the creation of a Green Fund using official funds to leverage private financing.
“This will be a fulcrum for raising long-term resources from developed countries to finance green projects.
“In this regard, AfDB may need to give deeper thought to this avenue,’’ Ahmed said.
According to the minister, the only challenge of this kind of financing arrangement may be on how the developed countries would face the burden sharing problem.
According to Ahmed, governance structure of the fund and disbursement matter to developing countries for green projects will need to be straightened out.
She said there was also the need to emphasise the importance of appropriate policies for more inclusive economic and financial development and sustainable foreign direct investment.
She explained that this does not incur adverse ecological consequences for African economies.
The minister said: “I share in the wisdom that public private partnership in developing countries should pave way for identification of climate change risks culminating in response measures and adaptation.
“Going forward and drawing from actions in advanced countries, private sector investment in Africa can be geared towards replicating climate-resilient technologies and services in critical development sectors.
“This includes infrastructure (roads, rail transportation, aviation, power) and agri-business.
This is “towards economic progress that fosters environmentally sustainable low-carbon and socially inclusive development to achieve green growth’’.
The News Agency of Nigeria (NAN) reports that the AfDB annual meetings which started on May 22 ends of Friday.
The theme of the meetings is “Mobilizing Private Sector Finance for Climate Change and Green Growth’’.
The meetings provide a framework for Bank Group Governors to share their experiences with galvanising private financing domestically and internationally.
It also comprises statutory meetings of its Governors (finance ministers or central bank governors representing the 81 member countries and knowledge events. (NAN)