IMF urges Nigerian central bank to prioritise climate action

October 9, 2023|Written by Scott Speer|Central Bank of Nigeria

Climate change poses risks to price and financial stability, warned an International Monetary Fund (IMF) representative at a workshop held by the Central Bank of Nigeria (CBN).

The comments were made by the IMF resident advisor, Vimal Thakoor, during a joint workshop at the African Training Institute organised by the CBN and the IMF. Focusing on the main climate risks the region faces, Thakoor said the inaugural workshop aimed to build more resilient economies which can better withstand climate shocks and sustain development.

Thakoor emphasised the role played by central banks and finance ministries in integrating climate policies into economic frameworks. By taking measures to address climate risks, central banks can secure price and financial stability in the long run.

In the past, the IMF has been accused of failing to use its influence to further countries’ green transitions, and helping to create the conditions for financing fossil fuel-boosting subsidies. It has been reported that multinational development banks, including the IMF, directed more than USD$3bn to fossil fuel projects.

Civil society organisations say that not only has the IMF undermined climate-positive investments, but the conditions for IMF loans have historically led to crushing austerity.

“The pace at which countries can implement climate policies varies due to factors like capacity and access to financing,” Thakoor admitted. He said the IMF is scaling engagement with member countries on addressing the macroeconomic dimensions of climate change, pointing to the resilience and sustainability trust, which seeks to approve access to finance, as one example of the IMF’s policy reform. This facility seeks to help low-income and vulnerable countries address climate change.

Additionally, the IMF has been vocal in urging countries to adopt debt-for-climate swaps. Nevertheless, many nations have expressed the need for greater urgency in providing climate finance, as demonstrated in recent discussions at the Climate Vulnerable Forum. As organisations and countries prepare for Cop28, discussions about ensuring the green transition is also just one are likely to increase.

This page was last updated October 9, 2023

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