Nigeria is turning to domestic financial institutions and private capital to bridge a staggering $171 billion climate financing gap, as policymakers warn that multilateral funding accounts for less than two percent of the continent’s climate finance needs.
The financing challenge took centre stage at the 2026 Financial Institutions Training Centre (FITC) Sustainability and ESG Conference in Lagos, where regulators, bankers, and development finance leaders agreed that the country’s path to achieving net-zero emissions by 2060 will depend less on external aid and increasingly on local capital markets, green bonds, and sustainability-linked financing.
Philip Ikeazor, deputy governor for economic policy at the Central Bank of Nigeria (CBN), said Africa could no longer rely on traditional sources of climate finance, noting that multilateral climate funds contribute less than two percent of the continent’s total climate financing requirements.
According to him, the funding shortfall presents an opportunity for domestic financial markets to become the primary drivers of sustainable investment, which they can achieve by mobilising local capital.
To accelerate capital mobilisation, Ikeazor called for wider adoption of innovative financing instruments, including green bonds and sustainability-linked loans, while urging financial institutions to integrate climate and environmental risks into mainstream lending and investment decisions.
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The CBN’s growing emphasis on sustainable finance reinforces the need for regulators to encourage banks to incorporate environmental, social, and governance (ESG) considerations into risk management frameworks.
Chizor Malize, managing director and chief executive officer of FITC, said sustainability has moved beyond corporate reporting to become a central pillar of economic strategy.
She argued that Africa’s young population and abundant natural resources present a significant opportunity for growth, but warned that the continent must shift from discussing sustainability to implementing practical solutions capable of building resilient institutions and stronger economies.
Around the world, Sustainability and ESG have moved from the margins of corporate reporting to the centre of economic strategy, according to Malize.
She added that achieving meaningful progress would require organisations to move beyond individual initiatives towards collective action capable of delivering measurable economic and social impact, which is essential for the success of initiatives like the net-zero emissions target.
The growing emphasis on local capital also received backing from the development finance community, with Olapeju Ibekwe, chief executive officer of ONE Foundation, saying impact investing is becoming increasingly critical to financing scalable solutions across healthcare, education, and climate resilience.
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With the country pursuing a net-zero emissions target by 2060, experts said a
The conference concluded with calls for closer collaboration among regulators, financial institutions, development organisations and private investors to mobilise domestic capital at scale and accelerate the structural reforms needed to support Nigeria’s transition to a low-carbon economy.
Nigeria’s approach to climate finance is likely to be watched closely by other countries facing similar challenges.
Its success or failure could have significant implications for the global effort to address climate change.
As Nigeria continues to develop its climate finance strategy, it will be important to monitor the progress of initiatives such as the CBN’s sustainable finance programme and the growth of green bonds and sustainability-linked loans in the country.