Article summary
- The World Economic Forum has called on developing economies to fast-track progress on climate change mitigation.
- Africa receives $29.5 billion annually, as opposed to the $277 billion it needs for climate financing. In the Nigerian context, this lack of financing has a lot to do with transparency issues.
- The cost-of-living pressures are particularly acute in some developing economies, where domestic price dynamics are exacerbated by currency depreciation.
The World Economic Forum has said that there is a perceived need for strong public sector involvement in climate change mitigation in order to drive progress. This is according to the May 2023 Chief Economist Outlook.
In its outlook, the World Economic Forum highlighted the need for developing economies to drive progress on major national and global challenges, especially climate change mitigation and infrastructure development.
It is important to note at this point that in November 2022, Nigeria’s Vice President, Prof. Yemi Osinbajo, said Africa receives $29.5 billion annually as opposed to the $277 billion it needs for climate financing.
According to the WEF outlook, developing economies are facing a number of issues that are limiting progress and restricting investments. Some of the factors that are affecting developing economies like Nigeria include; tepid global conditions, policy uncertainty, weak investment environments and some of the highest inflation rates globally.
Chief economists at the World Economic Forum believe that cost-of-living pressures are particularly acute in some developing economies, where domestic price dynamics are exacerbated by currency depreciation. Also, the twin pressures of deepening geopolitical tensions and intensifying industrial policy are only making things worse.
The Nigerian context
In Nigeria, the continuous depreciation of the naira as well as inflationary pressures, forex issues, policy somersaults, and a host of other in-country challenges, have made it difficult for local and foreign investors, who could help address climate change issues, to invest in the country.
The Nigerian government has always stated that it is committed to climate change mitigation. Nigeria has funding challenges when it comes to addressing climate change issues. However, the prevailing challenges previously mentioned by WEF abound in the country. Also, the deepening geopolitical tensions are contributing to the already limited options facing the country.
What Nigeria needs is transparency
Last month, the President of the Association of Environmental Protection and Climate Change Experts, Air Vice Marshal Akugbe Iyamu said that Nigeria needs to be transparent in its climate change activities to access climate financing.
According to Iyamu, the international management of climate financing has three pillars: adaptation, mitigation, and the means of administering those funds, and Nigeria needs to access available climate funds. However, the country has transparency issues that need to be addressed if any progress is to be made in this regard.
What you should know
The African Development Bank, (AfDB) has said that Africa may lose as much as 12% of its GDP by 2100, if current trends in climate finance flows into Africa continue. According to the AfDB, Africa faces an annual shortfall that could exceed $127 billion by 2030.