BY COBHAM NSA – The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, says current high cost of borrowing is choking Africa’s infrastructure development, warning that the continent cannot build its future on the back of current crushing interest rates.
Advancing argument that without access to cheaper capital, vital projects like roads, power grids, and hospitals will remain stalled, locking millions out of economic progress, Oyedele said there is an urgent need for a crucial pivot toward cheaper, sustainable infrastructure financing
The Minister made the call while addressing the United Nations Dialogue on Solutions to Climate Finance on the margins of the 81st Session of the United Nations General Assembly in New York, urging the international community to scale up the availability of affordable capital to finance infrastructure and development across the continent.
He said with Africa’s development ambitions, particularly its energy needs, mainly constrained by high financing costs, currency risks and limited access to affordable long-term capital, the continent urgently needs cheap financing cost to unlock its infrastructure boom, noting that the relatively low contribution to global carbon emissions notwithstanding, the continent continues to face a “prejudice premium” and “narrative cost” in its efforts to mobilise financing for critical infrastructure.
While also identifying currency risk and what he termed “stereotype tax” as additional burdens confronting African countries seeking to raise capital for critical energy and other development assets, Oyedele canvassed a strategic shift in the approach to climate finance, with simpler access to affordable capital for developing countries and financing arrangements that better reflect their development realities.
A statement by Head information and Public Relations, Federal Ministry of Finance, Efe Ovuakporie quoted the Minister as also urging the international community to boost investment in gas and other transition energy sources, particularly in Africa, to expand access to reliable and affordable energy and help address global energy poverty.
Framing Africa’s energy expansion as a vital buffer for a volatile global market, Oyedele noted that diversifying supply away from the turbulent Gulf region reduces concentration risks for everyone, just as he cautioned that the West’s timeline for a green transition must align with African realities
However, he said with millions still lacking basic electricity, future funding must balance carbon reduction with the immediate developmental needs of the continent, maintaining that greater investment in Africa’s energy sector would also help diversify global energy supply and reduce concentration risks, particularly amid disruptions affecting the Gulf region.
According to him, Africa must be allowed a practical path toward cleaner energy that does not ignore its severe energy-access deficit, arguing that expanding investment across the continent’s energy sector will not only meet urgent domestic development needs but also safeguard global markets.
The Minister said the immediate priority was to structure and implement policies and programmes that would reduce poverty, expand economic opportunities and accelerate the distribution of shared prosperity.
Oyedele noted that international cooperation alone will not suffice as it must be backed by institutional finance, emphasizing that a newly structured financial framework is vital to help developing economies scale up infrastructure investments, the very investments required to drive human development, economic stability and improve the lives of their people.
