…Says high financing costs, currency risks constrain development
By Emma Ujah, Abuja Bureau Chief
ABUJA — The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has called for a major shift in the global approach to financing Africa’s development, urging the international community to make affordable, long-term capital available for infrastructure and energy projects across the continent
Oyedele made the call at the United Nations Dialogue on Solutions to Climate Finance on the margins of the 81st Session of the United Nations General Assembly, UNGA, in New York
According to a statement by the Head of Information and Public Relations, Ministry of Finance, Efe Ovuakporie, the minister said high financing costs, currency risks and limited access to long-term capital were constraining Africa’s development ambitions
He said the financing challenges were particularly acute in the energy sector, where massive investment was required to bridge the continent’s energy-access deficit
Oyedele said Africa, despite its relatively low contribution to global carbon emissions, continued to face what he described as a “prejudice premium” and “narrative cost” when seeking financing for critical infrastructure
He also identified currency risks and what he termed “stereotype tax” as additional costs confronting African countries seeking to mobilise capital for infrastructure and other development assets
The minister therefore called for a strategic rethink of climate finance, with financing arrangements designed to reflect the development realities of developing countries and provide simpler access to affordable capital
Oyedele also advocated increased investment in natural gas and other transition energy sources in Africa, arguing that the continent needed reliable and affordable energy to tackle poverty and support economic development
He said greater investment in Africa’s energy sector would not only address energy poverty but also diversify global energy supplies and reduce concentration risks, particularly amid disruptions affecting the Gulf region
The minister stressed that Africa’s energy transition must be anchored on the continent’s development needs, given its significant energy-access gap
He said African countries needed greater investment to expand electricity and other energy infrastructure while pursuing a practical transition towards cleaner energy sources
Oyedele said the global climate-finance framework should accommodate the different circumstances of developing countries rather than impose financing conditions that could further constrain their development
For Nigeria, he said the immediate priority was to design and implement policies and programmes capable of reducing poverty, expanding economic opportunities and accelerating the distribution of shared prosperity
He noted that achieving these objectives would require stronger international cooperation and a financing framework that would enable developing countries to mobilise the capital needed to invest in infrastructure and improve living standards
Oyedele’s intervention at the UNGA dialogue places access to affordable finance at the centre of Africa’s development and energy-transition agenda, amid calls for international financing institutions to make more capital available to developing economies on sustainable terms