Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, says high cost of capital is undermining Africa’s ability to finance critical infrastructure, expand energy access and achieve its development ambitions.
Oyedele made the submission at a United Nations Dialogue on Solutions to Climate Finance on the margins of the 81st Session of the United Nations General Assembly in New York.
He said Africa’s infrastructure and energy deficits could not be addressed without a significant increase in access to affordable, long-term financing.
According to the Minister, high financing costs, currency risks and limited access to long-term capital are making it more difficult for African countries to mobilise the resources required for development.
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He said the challenge was particularly significant in the energy sector, where inadequate investment continues to constrain access to reliable and affordable electricity across the continent.
Oyedele argued that Africa faces additional financing disadvantages despite contributing relatively little to global carbon emissions.
He described the additional costs as a “prejudice premium”, “narrative cost” and “stereotype tax”, saying such factors increase the burden on African countries seeking financing for infrastructure and energy projects.
The Minister therefore called for a rethink of the global climate-finance framework, with simpler access to affordable capital and financing structures that take into account the development realities of poorer countries.
Greater Investment
He also urged greater investment in gas and other transition energy sources in Africa, arguing that the continent needs to expand reliable energy supply while pursuing a gradual transition to cleaner energy.
Oyedele said increased investment in Africa’s energy sector could also diversify global energy supplies and reduce concentration risks, particularly amid disruptions affecting the Gulf region.
He stressed that Africa’s energy transition should not be separated from the continent’s energy-access deficit.
“We need to recognise the development realities of Africa and ensure that the financing framework enables countries to meet their energy and infrastructure needs while transitioning to cleaner sources,” he said.
On Nigeria, Oyedele said the immediate focus should be on policies and programmes that reduce poverty, expand economic opportunities and accelerate the distribution of shared prosperity.
He said stronger international cooperation would be required to create a financing environment capable of supporting infrastructure investment and improving living standards.
Oyedele’s call comes as financing for energy and infrastructure remains a major issue in Africa’s development agenda, with international institutions increasingly exploring ways of mobilising private and public capital for the continent’s energy transition.
