A new Fitch Ratings report warns that Nigerian banks face growing credit risks from climate change. The agency says the country's heavy reliance on oil, gas, and agriculture makes its lenders especially vulnerable to both physical risks like floods and droughts and transition risks from global decarbonization policies. Fitch projects Nigeria could score between 50 and 55 on its climate vulnerability index by 2050, putting it among Africa's most exposed economies alongside Ghana, Kenya, and South Africa. The report notes that stricter climate commitments could strand carbon-intensive assets, raising non-performing loans. It also highlights that Nigeria is developing carbon pricing and carbon market frameworks under the Paris Agreement. For banks with large exposure to hydrocarbons and farming, the message is clear: climate risk is becoming a credit risk that will reshape lending practices over the next few decades.
