Nigeria is working to establish a framework to attract climate finance for smallholder farmers, with experts advocating targeted investments, digital accountability and stronger financial systems to address the effects of climate change on agriculture.

Chairman of the Presidential Implementation Committee on Technology Transfer, Dahiru Muhammed, disclosed this at a Taxonomy Validation Workshop on Adaptation and Resilience Solutions organised by PICTT in collaboration with YAPU Solutions in Abuja on Tuesday.

Mr Muhammed said the workshop was designed to develop an implementation framework for Nigeria’s national taxonomy, which defines activities eligible for climate finance.

He explained that the Federal Ministry of Finance and the United Nations Development Programme were working on the national taxonomy, while PICTT and its partners were focusing on making the framework operational and accessible to rural communities.

“Having a national taxonomy is good, but without defining which activity qualifies as adaptive or resilient to climate change, there is no way you can access the financing,” he stated.

Mr Muhammed clarified that the financing had not yet been assessed, noting that stakeholders were still developing the framework and identifying the partners required to implement it.

He said governments at the federal, state and local levels must work together to address climate-related challenges, particularly flooding, through improved infrastructure and effective mitigation measures.

Country Representative of WorldFish in Nigeria, Charles Nyangbe, said Nigeria needed financial instruments tailored to the different climate challenges confronting farmers across the country.

He noted that northern Nigeria faced drought, while southern communities experienced flooding and waterlogging, requiring different adaptation strategies and financing arrangements.

Mr Nyangbe said the proposed taxonomy would help financial institutions develop sustainable lending mechanisms for farmers, stressing that climate finance differed from conventional government budgetary allocations.

“Government should come up with an envelope of funding that is targeted at climate financing, give it to financial institutions, and give it to commercial banks so that they can lend,” he said.

Managing Director of YAPU Solutions, Christoph Junghleisch, estimated that climate adaptation presented an investment opportunity of up to $30 billion annually for smallholder farmers.

He said the organisation was working with PICTT to establish a framework connecting climate adaptation solutions with appropriate financing.

Mr Junghleisch noted that initial plans could involve a pilot project worth between $100m and $200m, with the ambition of scaling up financing to $1 billion in the first expansion phase.

“What we are focusing on is smart use of technology, optimisation of processes that enable you to document each and every cent, Naira, that you are basically bringing to the smallholder farmers,” he said.

The workshop brought together financial institutions, agricultural experts and other stakeholders to validate the taxonomy, identify suitable financing instruments and develop an implementation timeline.

The organisers said the framework would help direct climate finance towards vulnerable farming communities, strengthen agricultural resilience and protect livelihoods, although the proposed investment targets remain prospective.