KEY POINTS
• Taiwo Oyedele says high financing costs are constraining Africa’s infrastructure and energy development.
• He identifies currency risks and other financing burdens affecting African countries seeking capital.
• The minister calls for simpler and more affordable financing arrangements for developing countries.
• He also seeks increased investment in gas and other transition energy sources.
MAIN STORY
The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has called for more affordable capital to support infrastructure development across Africa.
Oyedele made the call at the United Nations Dialogue on Solutions to Climate Finance in New York, held on the margins of the 81st Session of the United Nations General Assembly.
According to the minister, Africa’s development ambitions, particularly in the energy sector, are being constrained by high financing costs, currency risks and limited access to long term capital.
He said the continent’s relatively low contribution to global carbon emissions had not protected it from higher financing costs.
Oyedele described the additional burden as a “prejudice premium” and “narrative cost”, saying they affected Africa’s ability to mobilise funds for critical infrastructure.
He also identified currency risks and what he called “stereotype tax” as additional burdens for African countries seeking financing for energy and development projects.
The minister urged the international community to adopt simpler and more affordable financing arrangements that reflect the development realities of developing countries.
Oyedele also called for increased investment in gas and other transition energy sources, particularly in Africa.
He said such investment would expand access to reliable and affordable energy while helping to address global energy poverty.
According to him, stronger investment in Africa’s energy sector would also help diversify global energy supplies and reduce concentration risks.
He said this was particularly important amid disruptions affecting the Gulf region.
Oyedele stressed that Africa’s energy transition must take into account the continent’s significant energy access deficit.
He said greater investment was therefore needed to enable African countries to meet their development needs while pursuing practical transitions to cleaner energy sources.
For Nigeria, the minister said the immediate priority was to implement policies and programmes aimed at reducing poverty and expanding economic opportunities.
He said such measures would accelerate the distribution of shared prosperity among Nigerians.
Oyedele said stronger international cooperation and a financing framework supportive of developing countries would be required to achieve these objectives.
He said such a framework would enable countries to mobilise the capital needed to develop infrastructure and improve citizens’ livelihoods.
THE ISSUES
- Oyedele identified the cost and availability of financing as constraints on Africa’s infrastructure and energy development. He said high financing costs, currency risks and limited access to long term capital were affecting the continent’s development ambitions.
- The minister argued that Africa’s relatively low contribution to global carbon emissions had not shielded its countries from higher financing costs. He referred to the additional burdens as a “prejudice premium”, “narrative cost” and “stereotype tax”.
- Africa’s energy transition presents a particular financing challenge because of the continent’s significant energy access deficit. Oyedele called for investment that would allow African countries to expand energy access while pursuing practical transitions to cleaner sources.
- For Nigeria, Oyedele identified poverty reduction and the expansion of economic opportunities as immediate priorities. He said achieving these goals would require financing and international cooperation that support developing countries.
WHAT’S NEXT
Oyedele called for stronger international cooperation and a financing framework that would support developing countries in mobilising capital for infrastructure and development.
He also called for increased investment in gas and other transition energy sources in Africa.
BOTTOM LINE
Oyedele says Africa needs more affordable financing to address its infrastructure and energy needs. He is calling for a financing framework that reflects the development realities of developing countries.
