OSINBAJO PUSHES SWAP OF NIGERIA’S DEBT FOR INTERNATIONAL CLIMATE CHANGE ACTIVITIES
Vice President Prof. Yemi Osinbajo has said that if Nigeria’s debt is swapped with international climate change activities, it will lead to a relief in billions of dollars.
The expectation is that the Debt For Climate Swap idea will reduce the level of indebtedness and free up fiscal resources to be invested in clean energy projects in Nigeria and other countries signed up for the programme.
He explained that the debt for climate is a type of swap where bilateral or multilateral debt is relieved by creditors in exchange for a commitment by the debtor to use the outstanding debt service payments for national climate action programmes.
He said that commitment to it will “increase the fiscal space for climate-related investments and reduce the debt burden for participating developing countries.”
In a statement by his media aide, Laolu Akande, the Vice President described the idea as a Climate Change related financing instrument deserving of global consideration as it is a win-win proposal.
He also proposed a significant addition to conventional capital flows both from public and private sources to Africa by giving countries of the continent greater participation in the global carbon finance market.
He expressed hope of getting support and international buy-ins for the ideas, and appealled to developed countries to support “Africa to develop into a global supplier of carbon credits, ranging from bio-diversity to energy-based credits,” which would be a spring forward in aligning carbon pricing and related policy around achieving a just transition.
He said that “carbon markets can have significant role in catalyzing sustainable energy deployment by directing private capital into climate action, improving global energy security, providing diversified incentive structures, especially in developing countries, and providing an impetus for clean energy markets when the price economics looks less compelling – as is the case today.”
Responding to the Debt-for-Climate proposal, the administrator of United State Agency for International Development (USAID) Samantha Power told the Vice President that the idea was “fresh thinking that is very exciting,” adding that the US is open to such new thinking though it will require the full policy review of U.S. government.
While in the U.S., Osinbajo met with his American counterpart, Vice President Kamala Harris, at the white house, the secretary of treasury, Ms. Janet Yellen, and the administrator of USAID.
He also held an interactive session with a group of Nigerian staff members of the World Bank and the International Monetary Fund (IMF) before he spoke at the Centre for Global Development.
