High borrowing costs choking Africa’s infrastructure drive – Oyedele

Nigeria's Minister of Finance, Taiwo Oyedele, has highlighted the challenges facing Africa's infrastructure development due to high borrowing costs and limited access to affordable long-term capital. Speaking at the United Nations Dialogue on Solutions to Climate Finance in New York, Oyedele noted that Africa's development goals, especially in energy, are hindered by elevated financing expenses, currency risks and the lack of affordable long-term capital.

Oyedele described the additional financing burden as a "prejudice premium" and "narrative cost", while also identifying currency risks and a "stereotype tax" as further impediments for African countries in seeking capital for critical energy and other development assets. He called for a change in the global approach to climate finance, advocating for simpler access to affordable capital for developing nations and financing arrangements that accurately reflect their economic and development realities.

The minister emphasized that Africa's transition to cleaner energy must consider the continent's significant energy-access deficit and urged the international community to increase investment in gas and other transition energy sources in Africa. This, he believes, could expand access to reliable and affordable energy, diversify global energy supplies and mitigate concentration risks.

For Nigeria, the priority is to implement policies and programs aimed at reducing poverty, expanding economic opportunities and accelerating shared prosperity, all of which would require stronger international cooperation and a financing system that allows developing countries to mobilize sufficient capital for infrastructure.