The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has identified high financing costs, currency risks and limited access to affordable long-term capital as major constraints to Africa’s infrastructure development.
Oyedele said the challenges were particularly affecting efforts to finance critical energy projects and address the continent’s development needs, despite Africa’s relatively low contribution to global carbon emissions.
The minister spoke at the United Nations Dialogue on Solutions to Climate Finance on the sidelines of the 81st Session of the United Nations General Assembly in New York, according to a statement issued by the Federal Ministry of Finance on Wednesday.
He said African countries often face additional costs when seeking funding for development projects, describing the burden as a “prejudice premium” and “narrative cost.”
Oyedele also identified currency risks and what he termed a “stereotype tax” as factors increasing the cost of capital for African borrowers.
He called for a shift in the global approach to climate finance, including simpler access to affordable capital and financing arrangements that take into account the economic and development realities of developing countries.
The minister also urged increased investment in gas and other transition energy sources in Africa, arguing that stronger investment in the sector would expand access to reliable and affordable energy while diversifying global energy supplies.
Oyedele said Africa’s transition to cleaner energy must take into account the continent’s significant energy-access deficit, stressing the need for increased investment to enable countries to meet their development needs while pursuing a practical transition to cleaner energy sources.
On Nigeria, he said the Federal Government’s immediate priority was to implement policies and programmes aimed at reducing poverty, expanding economic opportunities and accelerating the distribution of shared prosperity.
He added that achieving these objectives would require stronger international cooperation and a financing framework capable of enabling developing countries to mobilise sufficient capital for infrastructure development and improved living standards.
