At the 6th African International Conference on Islamic Finance (AICIF) themed ‘Towards a Just Transition,’ it was revealed that Africa, including Nigeria, requires an annual investment of $22.6-$30 billion to address the energy financing gap amid global efforts to combat climate change. The disclosure, made by Ummahani Amin, the Convener and Conference Chair, highlighted the need for climate funds to aid vulnerable African nations grappling with the severe consequences of climate change, such as rising mortality rates, human displacements, and migration.
Amin, who is also the Founder of Metropolitan Law Firm, emphasized the existing systemic challenges hindering the just transition process in Africa. These challenges include limited private sector participation, escalating debt vulnerability of African countries, and a lack of transparency and accountability in financial flows.
According to the CEO of Metropolitan Skills Limited, out of the $29.5 billion allocated for climate finance to Africa in 2019/2020 by the African Development Bank Group, only $9.4 billion (32%) was directed toward energy systems. This leaves an annual energy financing gap in Africa ranging from $22.6 billion to $30.6 billion. Amin proposed that Islamic finance, with its global assets exceeding $2 trillion, presents a sustainable financing system for Africa’s just transition, citing Sukuk and Islamic finance lending as viable tools for delivering clean energy infrastructure.
She explained that these financial products, with low risks and guaranteed returns, can support clean energy projects and large-scale programs in African countries. The AICIF was identified as an opportunity to strengthen the community of practice focused on promoting and developing Islamic finance to shape sustainable economic practices.
Additionally, Amin asserted that the conference aimed to establish a sustainable endowment fund dedicated to supporting educational opportunities for the less privileged. Meanwhile, Nigeria’s Vice President, Kashim Shettima, represented by a Special Adviser to the President on Economic Matters, Tope Fasua, acknowledged the untapped potential of Islamic financing in driving a more competitive economy but noted that Nigeria’s finance sector lags in adopting Islamic financing within its financial market.
