Wale Edun, Minister of Finance and Coordinating Minister of the Economy, has said Nigeria needs to explore climate financing to shore up revenue to fund the 2024 budget.
Edun, who spoke during the 2024 budget interactive session with the stakeholders at the Nigerian Senate, on Tuesday, acknowledged that Nigeria’s fiscal space is exhausted in line with the position of the International Monetary Fund (IMF), Edun, therefore proposed a strategic shift towards concessional funding, including climate financing, as a viable solution.
“Nigeria’s fiscal space is exhausted, we have to focus on the concessional funding, the cheaper funding, even free funding and climate financing is the way. The solution is that we have to focus on concessional funding, the cheaper funding, even free funding, and climate financing is the way”, he stated.
He highlighted the urgency of addressing the fiscal constraints and reducing dependence on borrowing, particularly foreign borrowing.
Edun pointed out that with an estimated $1 trillion annually to be spent on climate change, he emphasized the significance of climate financing in funding the ambitious N27.5 trillion budget.
“Just yesterday (on Monday) UAE announced a $30 billion dollars for climate action. What that means is that as we look to fund the $27.5 trillion budget this year, our first port of call must be the most cheapest and the most concessionary finacing, including climate financing.
“We have to be brave, courageous, innovative to make sure that we use the financial market to take the stress down, to reduce our debt servicing, to reduce our emphasis on borrowing,” Edun urged.
The Minister highlighted recent strides, including the signing of a 100 million euros foreign direct investment for reforestation of mangrove forests in Cross River. He underscored the importance of maximizing existing assets without resorting to excessive borrowing.
He also mentioned the possibility of leveraging countries and organizations willing to allow funding based on their credit ratings, which could alleviate debt service burdens for Nigeria.