Nigeria is building a framework to channel climate-adaptation finance to smallholder farmers. At an Abuja workshop, experts cited an investment opportunity of up to $30 billion a year. The figure is a participant’s estimate, not a government target or a funding commitment.
A taxonomy to define what qualifies
A national taxonomy classifies which activities count as green or climate-resilient for financing purposes. The Federal Ministry of Finance and the United Nations Development Programme (UNDP) are leading Nigeria’s. Dr Dahiru Muhammed, Chairman of the Presidential Implementation Committee on Technology Transfer (PICTT), said PICTT and its technical partners are working to make it usable at rural level. He spoke at a Taxonomy Validation Workshop on Adaptation and Resilience Solutions, co-organised with YAPU Solutions.
Without a clear definition of which activities are adaptive or resilient, Muhammed said, there is “no way you can access the financing”. He added that federal, state and local governments must work together on climate challenges, particularly flooding, through better infrastructure and mitigation.
Different regions, different tools
Dr Charles Nyangbe, Country Representative of WorldFish in Nigeria, said generic funding mechanisms are not enough. Northern Nigeria faces drought, while southern communities face flooding and waterlogging, so each region needs its own instruments. He cited index-based insurance and blended finance as ways to reduce the risk of lending to farmers.
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Nyangbe urged government to set aside an “envelope of funding” for financial institutions and commercial banks, using public money as credit guarantees to unlock bank lending. He said Nigeria has attracted about $2.5 billion in climate-related financing, well below what is needed. He also urged policymakers to extend green finance beyond crops to aquaculture, livestock and fisheries, noting that flooding can destroy fish ponds and cause heavy losses.
The $30bn figure and the pilot
Christoph Junghleisch, Managing Director of YAPU Solutions, a Berlin-based fintech that builds digital credit-assessment tools for microfinance institutions, estimated that climate adaptation represents an investment opportunity of up to $30 billion a year for smallholder farmers. YAPU is working with PICTT on a framework linking adaptation solutions to finance. Initial plans could include a pilot worth $100 million to $200 million, scaling to $1 billion in a first expansion phase. Junghleisch said these are targets, not confirmed funding commitments.
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He said digital technology would be central to accountability. The proposed system would document funds reaching smallholders so every transaction can be audited. “We are focusing on smart use of technology” to “document each and every cent”, he said. YAPU is talking to the Bank of Agriculture and the African Development Fund and is seeking private investment. Government policy, legislation and regulation will be essential, he said, though public funding alone cannot meet the scale required.
