Director General of the Nigerian Meteorological Agency (NiMet), Professor Charles Anosike, has warned that Nigerian banks face growing credit risks from climate-related disasters. He said these risks threaten borrowers’ loan repayments and reduce asset values, creating wider financial instability.
Credit risks are the potential losses a lender or investor faces if a borrower fails to repay a loan or meet financial obligations.
Speaking at the Investor Roundtable and ISSB Readiness Programme hosted by the Nigerian Stock Exchange Group in Lagos, Anosike explained that extreme weather events are straining private insurance markets. He warned that more costs are now being shifted to government-backed insurance schemes, raising questions about their long-term sustainability.
According to him, the World Economic Forum (WEF) ranks extreme weather among the top global threats, with significant implications for financial systems.
“These events carry both short and long-term credit risks, driving economic losses, disrupting supply chains, inflating food prices, and increasing insurance costs, especially in developing economies,” Anosike said.
He emphasised that integrating meteorological data into sustainability reporting is urgent to close Nigeria’s climate information gaps.
“Meteorology provides the foundation for sustainability reporting. Accurate weather and climate data are essential for disaster preparedness, public health, agriculture, aviation safety, marine operations, and indeed a sustainable economy,” he explained.
Highlighting NiMet’s role, Anosike said the agency remains central to Nigeria’s climate data management, early warning systems, and socio-economic resilience efforts.
“Greater investment, mutual engagement, and quality data sharing are critical for effective sustainability reporting. They will foster trust, transparency, and collective progress toward climate-informed financial goals,” he added. He further said it would give financial organisation the means to plan with their borrowers to avoid credit risk.
He further pledged NiMet’s commitment to deeper collaboration with financial regulators, banks, and investors to expand access to reliable climate data to mitigate credit risk. This, he said, would help strengthen climate finance and embed resilience within Nigeria’s financial markets.
Financial experts at the programme agreed that climate damages are already reshaping credit and market risks. Rising floods, prolonged droughts, and temperature extremes increase default rates, strain insurance payouts, and lower asset values. The growing cost burden has placed pressure on both private insurers and government-supported schemes.
Analysts warn that unless stronger adaptation strategies are implemented, Nigerian banks may continue facing mounting credit risks. They recommend that banks adopt climate stress tests, develop sector-specific lending frameworks, and strengthen partnerships with agencies like NiMet.
The discussion also highlighted opportunities in climate finance, such as green bonds, renewable energy projects, and resilience-focused infrastructure investments. Participants noted that these options could mitigate losses while supporting Nigeria’s transition toward a low-carbon economy.
Anosike concluded by stressing that climate change is no longer a distant risk but a present financial threat. “We must work together to integrate climate data into all reporting and planning frameworks.
The cost of inaction will be far higher than the cost of preparedness,” he said. He inclined that preparedness is a step in the right direction to avoid unnecessary credit risk.
