Members of Nigeria’s Integrated National Financing Framework (INFF) Core Working Group convened in Lagos on the 3 of October 2024 for a two-day working retreat aimed at refining the country’s development financing strategy. The gathering marked a pivotal milestone in Nigeria’s efforts to mobilize resources for its development agenda.

The retreat was held in response to a directive from the INFF Steering Committee to revise the INFF roadmap and Monitoring & Evaluation framework, ensuring alignment with Nigeria’s evolving development priorities and global best practices. A key aspect of the engagement involved reviewing the updated INFF roadmap, which was the product of extensive consultations with over 30 stakeholders representing the public and private sectors, civil society, development finance institutions, and academia.

The roadmap proposes four strategic recommendations:

• Refocusing the INFF as a financing reform framework.

• Prioritizing high-impact reforms within the INFF.

• Establishing a fund mechanism to support key initiatives.

• Strengthening communication and evaluation to track and measure progress.

With a narrower focus on 9 strategic objectives and 35 targeted initiatives, the roadmap is designed to be actionable, results-driven, and measurable, relying on established baseline data for clear progress tracking.Discussions also delved into Nigeria’s public finance transformation, particularly the urgent need for fiscal policy and tax reforms. 

Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, provided insights from the newly developed National Fiscal Policy Framework, emphasizing the necessity of adopting a holistic approach to government financing. He noted that this approach should go beyond taxation to enhance the quality and impact of government spending in critical areas such as health, education, living standards, and security, aligned with environmental, social, and governance (ESG) principles. Mr. Oyedele further stressed the efficient use of government debt and the importance of transparency and accountability in governance. With Nigeria’s tax-to-GDP ratio being one of the lowest globally, and with a target of 18% by 2026, he highlighted the need to harmonize tax systems, modernize revenue collection, and address tax evasion, particularly among high-income groups.

Participants echoed the call for better coordination across all levels of government to streamline tax administration, improve debt sustainability, and create fiscal space for sustainable investments.

The retreat also emphasized the critical role of private finance in accelerating Nigeria’s sustainable development, particularly through capital markets. 

Mr. Jude Chiemeka, CEO of the Nigerian Exchange Group (NGX) noted the underutilization of Nigeria’s capital markets in financing development projects. He noted the presence of a viable, well-regulated, and technology-driven capital market, which trades over $6 million per day, is a significant opportunity for federal and state governments to leverage in development financing. He outlined how Nigeria could leverage the capital markets through instruments such as green bonds (e.g. climate and blue bonds), social bonds (e.g gender bonds), and infrastructure bonds to fund critical projects at lower costs than traditional loans. Mr. Chiemeka introduced the NGX Impact Board, designed to attract local and foreign investments aligned with Nigeria’s SDG priorities. He also emphasized the potential of over $15 trillion in pension funds managed by Pension Fund Administrators, which could be directed toward sustainable investments. 

Mr. Bolaji Balogun, Co-chair of the Private Sector Advisory Group on SDGs, stressed the private sector’s untapped potential in financing the SDGs. He called for improved GDP measurement to reflect the size of Nigeria’s informal economy which has implications for investments. Mr Balogun also noted the need to improve bond issuance capacity for sub-national governments and provide tax incentives to encourage private investments in green and infrastructure projects. He also underscored the need to privatize Nigeria’s oil and gas assets while still profitable in view of global and domestic net-zero ambitions.

UNDP Senior Economics Advisor, Dr. Tony Muhumuza, highlighted the importance of improving sovereign credit ratings to reduce borrowing costs for development financing. He noted that bond issuance as a share of total debt in Africa had risen from 5% in 2000 to 22% by 2022. However, unfavorable credit ratings continue to make borrowing expensive for countries like Nigeria. Dr. Muhumuza pointed out that African nations could save up to $74.5 billion with more objective credit ratings, which would unlock significant financing for development.

UNDP Nigeria’s National Economist, Ms. Precious Akanonu, reaffirmed UNDP’s commitment to supporting governments, investors, and businesses in expanding and transforming public and private finance to achieve the SDGs. She underscored the importance of aligning public finance, budgets, taxes, and debt with the SDGs and highlighted the capacity-building initiatives available to support these efforts. Additionally, Ms. Akanonu emphasized the need to leverage private capital for development finance, spotlighting mechanisms such as SDG investor maps for impact investing, as well as insurance and disaster risk financing for sustainable development.

A Path Forward

The INFF Core Working Group retreat underscored Nigeria’s commitment to transformative reforms in development financing. The revised roadmap is set to guide the country toward a more prosperous and sustainable future, bridging fiscal gaps, and creating partnerships to leverage both public and private financing in line with national and global development goals.