Tuesday, April 23, 2024

Nigeria to rake in billions of dollars in debt-for-climate deal

Mr Osinbajo spent the week in America selling the idea of debtor nation’s committing to climate actions in exchange for debt forgiveness.

• September 4, 2022
Vice President Yemi Osinbajo
Vice President Yemi Osinbajo (Credit: Laolu Akande)

Vice President Yemi Osinbajo says the federal government will be reaping billions of dollars in debt relief from some creditors if the Debt-for-Climate (DFC) swap deal is accepted.

Mr Osinbajo’s spokesman, Laolu Akande, in a statement on Sunday in Abuja, said the swap deal was  proposed recently  in the U.S. by the vice president.

The idea, described as fresh thinking in Washington D.C by senior American government officials, is already receiving positive reviews even as Mr Osinbajo explained the potential for significant debt cancellation for African countries.

In his meetings with the top officials of the U.S. government right after his speech at the Centre for Global Development (CGD), Mr Osinbajo pushed the DFC idea.

“The proposed DFC swaps would be a very useful intervention and helpful as it will reduce debt burdens,” while advancing the Climate Change objectives of the international community.”

He also described the idea as a climate change related financing instrument, deserving of global consideration as it is a win-win proposal.

Mr Osinbajo also pushed the idea of opening up the Carbon Market in Africa so that the climate change actions of African countries could be adequately verified by the international community through the assessments of the appropriate verification institutions.

“We are hoping to get support and international buy-ins for these ideas,” specifically the DFC and the participation of African countries in the international carbon market, said the vice president.

He reiterated that the DFC will help solve many of the debt burden challenges in Nigeria and other countries.

Responding to the DFC proposal, Samantha Power, the Administrator of USAID, told the vice president that the idea was “fresh thinking that is very exciting”.

He added that the U.S. was open to such new thinking even though it would require the full policy review of the American Government.

Experts say that under the DFC, sovereign debtors and international creditors will forgive all or a portion of external debt.

The debts often run into billions in a country like Nigeria, in exchange for a commitment by the country to invest in domestic currency, in specific climate or energy transition projects during a commonly agreed period.

The expectation is that DFC Debt 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, once accepted by creditor-nations.

Mr Osinbajo had explained that the swap deal was a type of debt swap where bilateral or multilateral debt was forgiven by creditors in exchange for a commitment by the debtor to use the outstanding debt service payments for national climate action programs.

“Typically, the creditor country or institution agrees to forgive part of a debt.

“If the debtor country would pay the avoided debt service in a local currency into an escrow or any other transparent fund, and the funds must then be used for agreed climate projects in the debtor country,” he said.

While in Washington D.C., the vice president  met with his American counterpart,  Kamala Harris, at the White House and the U.S. Secretary of the Treasury, Janet Yellen.

He also held an interactive session with a group of Nigerian staff members of the World Bank and the IMF.

(NAN)

We have recently deactivated our website's comment provider in favour of other channels of distribution and commentary. We encourage you to join the conversation on our stories via our Facebook, Twitter and other social media pages.

More from Peoples Gazette

Katsina State

Politics

Katsina youths pledge to deliver over 2 million votes to Atiku

“Katsina State is Atiku’s political base because it is his second home.”

Speaker of the House of Representatives, Tajudeen Abbas and candles used to illustrate the story

Economy

Speaker Abbas laments challenges in power sector

He said this on Tuesday at a two-day workshop organised by the House of Representatives Committee on Power in Abuja.

Mr Aiyedatiwa addressing party members during a thank-you tour of the party secretariat in Akure.

Politics

Other aspirants are winners too but I’m APC flag bearer: Gov Aiyedatiwa

“We must ensure that all the other 15 aspirants must come together to ensure we win the November 16 election,” said the Ondo governor.

Iran-backed Hezbollah militia

World

Israeli drone kills Hezbollah member in south Lebanon

The Iran-backed militia confirmed the death of both fighters.

African refugees

Rights

Council of Europe slams UK asylum pact with Rwanda

The Council of Europe, a European rights body, has sharply criticised the United Kingdom for its controversial asylum pact with Rwanda.

Mykola Solsky (Credit: Webangah)

World

Ukrainian minister caught in land ownership scandal

Stamping out corruption is a key condition for Ukraine’s progress in the accession talks with the European Union, which kicked off in December.

SHANGHAI TOURISTS USED TO ILLUSTRATE THE STORY

World

Shanghai sees surge in inbound tourists in first quarter

Shanghai saw a surge in inbound tourists in the first quarter of this year thanks to tourism market recovery and China’s efforts to facilitate cross-border travel.