High borrowing costs choking Africa’s infrastructure drive – Oyedele

Minister of Finance, Taiwo Oyedele, has highlighted that high borrowing costs and insufficient access to affordable long-term capital are hindering Africa's infrastructure development and meeting its developmental goals. During the United Nations Dialogue on Solutions to Climate Finance, Oyedele pointed out currency risks and extra premiums that African borrowers face as significant barriers to capital influx in energy and other infrastructure projects across the continent.

He emphasized that despite Africa's minimal contribution to global carbon emissions, countries on the continent still bear higher costs when seeking financing for development. Oyedele described these challenges as a "prejudice premium" and a "narrative cost." He also identified currency risks and "a stereotype tax" as additional hurdles African nations encounter in their quest for capital to finance critical energy and other vital development assets.

The minister urged for a global shift in climate finance approaches, calling for simpler access to affordable capital for developing countries and financing arrangements that accurately reflect their economic and development realities. Oyedele called for increased investment in Africa's transition to gas and other transition energy sources to expand reliable and affordable energy access, which could also diversify global energy supplies and reduce concentration risks, particularly amid disruptions in the Gulf region.