Climate finance landscape in Nigeria

Abstract

The recently launched Nigeria’s energy transition bold and ambitious plan indicates that Nigeria needs a minimum investment of $10 billion annually until 2060 to achieve SDG7 goal by 2030 and achieve its net-zero target by 2060. With the multiplicity of other macroeconomic issues Nigeria is grappling with such as high debt burden, high borrowing costs from external sources, COVID-19 pandemic, and adverse effects of other external shocks, there is a need to understand the climate finance landscape in Nigeria. This paper provides an expository outlook into the climate finance options that Nigeria can take advantage of to mobilise resources domestically for climate action, without overbearing dependence on international loans and grants. Some of the options for domestic climate finance mobilization are green bonds such as sukuk green bonds and diaspora green bonds, emission trading, carbon taxes, budgetary allocations, tax exemptions and import waivers, among others. Reviewing the successes of other countries in sourcing climate finance through these instruments, Nigeria can leverage on the learnings from these countries to set up a more resilient framework for domestic climate finance mobilization to meet the climate change goals.