Selected Issues Papers

Macroeconomic Implications of Climate Challenges: Nigeria

By Reginald Darius, Aurelien Billot, Emanuele Massetti, Nate Vernon-Lin

July 11, 2025

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Format: Chicago

Reginald Darius, Aurelien Billot, Emanuele Massetti, and Nate Vernon-Lin. "Macroeconomic Implications of Climate Challenges: Nigeria", Selected Issues Papers 2025, 097 (2025), accessed July 12, 2025, https://doi.org/10.5089/9798229018692.018

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Summary

Climate events significantly impact Nigeria's growth outlook, fiscal sustainability, balance of payments and financial sector, potentially undermining macroeconomic stability. Extreme weather events and their frequency have a direct effect on growth and the balance of payments. An expected sea level rise would pose significant economic cost for Nigeria, damaging infrastructure in coastal areas such as Lagos—the main commercial and financial center. While relatively small, the financial sector is exposed to spillovers to asset quality and may even be directly impacted via its physical presence in Lagos. Fiscal policy will have to address lower tax revenues from lower growth and higher demands for spending on disaster relief, infrastructure repair, and investments in climate adaptation and mitigation. As a result, Nigeria will face fiscal and associated external financing gaps.

Subject: Agroindustries, Climate change, Climate policy, Economic sectors, Environment, Fuel prices, Greenhouse gas emissions, Inflation, Natural disasters, Natural gas sector, Non-renewable resources, Prices

Keywords: Adoptation policies, Agricultural sector, Agroindustries, Budget deficit, Climate change, Climate change, Climate policy, Economic growth, Emission reduction, Emissions, Fuel prices, Greenhouse gas emissions, Inflation, Mitigation strategies, Natural disaster, Natural disasters, Natural gas sector, Non-renewable resources

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