Climate change poses a growing financial stability risk for Africa, according to remarks attributed to Olayemi Cardoso, Governor of the Central Bank of Nigeria CBN. The Central Bank of Nigeria is the country’s apex monetary authority responsible for regulating financial institutions and managing monetary policy.
Cardoso reportedly highlighted how extreme weather events, droughts, flooding, and rising temperatures disrupt agricultural productivity, infrastructure, and credit systems. These disruptions can translate into higher non performing loans, insurance losses, and fiscal strain.
Financial experts explain that climate related shocks affect both supply chains and household incomes. When crops fail or infrastructure is damaged, economic output declines, reducing tax revenues and increasing public spending demands.
The Governor emphasized the need for climate risk assessment within banking supervision frameworks. Integrating environmental risk factors into lending and investment decisions, he said, will strengthen financial system resilience.
Analysts note that African economies remain heavily dependent on climate sensitive sectors such as agriculture and natural resources. As climate volatility intensifies, financial institutions must adapt risk modeling practices.
Green financing initiatives and sustainable investment frameworks are being encouraged as part of long term mitigation strategies. Policymakers argue that climate conscious regulation can unlock funding for renewable energy and environmental resilience projects.
Observers believe proactive planning will determine whether African economies can withstand environmental shocks without destabilizing financial systems. The call signals growing recognition that climate policy and monetary stability are increasingly interconnected.
