IMF Urges Nigeria to Prioritize Climate Policies in Economic Strategies

IMF Urges Nigeria to Prioritize Climate Policies in Economic Strategies

The International Monetary Fund (IMF) has urged Nigeria’s Federal Ministry of Finance and the Central Bank of Nigeria (CBN) to prioritize the integration of climate policies into the country’s economic strategies.

Vimal Thakoor, the IMF’s Resident Advisor for Macroeconomics and Climate, expressed this during the Africa Training Institute/IMF workshop on climate change and macroeconomic policies held in Abuja. Thakoor emphasized the vital role of these institutions in ensuring resources are allocated to finance climate policies, thereby enhancing resilience.

Potential Risks and the Role of the Central Bank

Thakoor highlighted the potential adverse effects of climate change on the stability of the economy, including inflation and financial sector instability. He pointed out that the Central Bank should acknowledge these risks and formulate policies to mitigate their potential adverse effects. By taking proactive measures against climate change risks, Thakoor believes the Central Bank could help maintain long-term price stability and financial system stability.

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Climate Change Considerations in Economic Strategies

Eva Jenkner, the Director of AFRITAC West 2, also underscored the importance of integrating climate change considerations into economic strategies during the event. Jenkner insisted that countries should understand climate-related risks, adapt policies to enhance resilience, and ensure that climate initiatives align with fiscal and debt sustainability goals. She warned that a failure to take adequate action on climate issues could lead to significant long-term costs.

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IMF’s Engagement and The Resilience and Sustainability Trust

Jenkner also noted that the IMF is stepping up its engagement with member countries to address the macroeconomic aspects of climate change. This involves advocating for policy reforms to enhance resilience, primarily through the establishment of The Resilience and Sustainability Trust, a mechanism designed to support these efforts.

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