Climate crisis meets debt crisis: Nigeria faces unmanageable burden as climate funds fall short

• New report uncovers Nigeria’s climate finance gap, rising debt, and calls for urgent action on funding reform

On average, Nigeria receives only 4% ($704 million) of the $17.7 billion it needs each year to adapt to the growing number of climate related disasters it faces, reveals a new report published by Connected Development (CODE), INKA Consult and Oxfam.

“The State of Climate Finance in Nigeria” report shows that 75% ($3.7 billion) of the total amount ($4.9 billion) received between 2015 and 2021 was in the form of loans, accounting for part of the 36% of the country’s total debt burden, which is at risk of debt distress. With over 37% of the national budget currently allocated to debt servicing, funds essential for climate resilience, healthcare, education, and other social sectors crucial to reduce inequality are missing.

Nigeria is among the ten most climate vulnerable nations globally and many Nigerians live in high-risk areas where climate impacts—such as erosion, drought, and rising temperatures—are becoming increasingly severe.

According to the report, Nigeria’s local governments and climate-vulnerable communities bear the brunt of inadequate climate financing. Without effective mapping and tracking of climate budgets, it’s difficult to determine what portion of climate funds or projects reach these frontline communities. Additionally, sub-national governments often lack both the technical capacity and funding to implement their own climate initiatives, further widening the gap.

The report highlights the challenges associated with the involvement of communities in climate finance management which includes access to data and clarity on types of projects as well as source of financing (either domestic or international). Although some civil society
organizations (CSOs) have pioneered initiatives to track climate spending at the local level, such efforts remain minimal without stronger collaboration among civil society and access to data on funding the government’s commitment.

The report calls for immediate reforms to Nigeria’s climate finance strategy, emphasizing that international donors and domestic policies must align to prioritize equitable, transparent, and impactful funding. Key recommendations include:

1. Increased Grants for Climate Action: Shift from concessional loans to grants, allowing Nigeria to build climate resilience without exacerbating debt.
2. Establish a Climate Finance Hub: Create a central platform for tracking and managing climate funds with input from the government, CSOs, and local communities.
3. Boost Domestic Funding Mapping: Integrate climate initiatives into Nigeria’s annual budget which are tagged appropriately while reducing reliance on international funds and prioritize community-focused adaptation projects.
4. Empower Local Governments: Build local capacity for climate planning, allowing states and municipalities to independently access climate funds and implement localized resilience projects.

Nigeria stands at a crossroads in its climate finance journey, with the cost of inaction likely to result in long-term human and economic suffering. The report urges both national and international actors to collaborate on sustainable finance solutions, ensuring that Nigeria can meet its climate goals while protecting its most vulnerable populations from climate disasters

ENDS.