Nigeria’s banking sector faces growing risks as the global shift toward a low-carbon economy threatens the fortunes of its biggest borrowers in the oil, gas, and agriculture sectors, according to Fitch Ratings.
The global rating agency said Nigerian lenders are among the most exposed in Africa to climate-related risks because a significant share of their loan books is tied to carbon-intensive industries and climate-sensitive sectors that could come under increasing pressure from decarbonisation policies and more frequent extreme weather events.
In a report titled African Banks Have Structural Exposure to Climate Risk: Credit Implications Evolving, Fitch said that while climate risks pose only a limited threat to banks’ credit profiles in the near term, both transition and physical risks are expected to intensify over the coming decades, reshaping asset quality and lending conditions across the continent.
“Nigerian banks are among the most exposed due to the country’s reliance on hydrocarbons
This post was originally published on this site.
