January 14, 2026/CSL Update
President Bola Tinubu has officially approved the implementation and operationalization of Nigeria’s National Carbon Market Framework (NCMF). The NCMF is a government-approved policy designed to establish a structured carbon market that enables Nigeria to generate, certify, and trade carbon credits in both voluntary markets and emerging international mechanisms under the Paris Agreement.
The framework sets out the institutional and operational foundations for carbon trading, including a national carbon registry, emissions reporting requirements, and project approval processes, with oversight led by the National Council on Climate Change. Its overarching goal is to position Nigeria as a significant player in global climate finance while supporting the country’s low-carbon transition.
For investors, the NCMF offers new revenue and diversification opportunities by turning emissions-reduction activities into tradable financial assets. Sectors such as renewable energy, forestry, agriculture, waste management, and methane capture stand to benefit, supported by incentives including tax exemptions on carbon revenues and other fiscal reliefs. The framework is also expected to attract foreign direct investment and climate finance, potentially generating up to US$3 billion annually by 2030, while aligning Nigeria with growing global demand for high-quality carbon credits.
Strategically, the NCMF sends a strong policy signal that Nigeria is seeking to integrate climate action with economic growth. By encouraging public-private partnerships, technology transfer, and international carbon trading, it could accelerate the development of green industries and enhance Nigeria’s standing in Africa’s emerging carbon market ecosystem. Early-stage participation may offer first-mover advantages for investors willing to engage in project development and market shaping.
However, there are notable risks and drawbacks. The NCMF is currently a policy framework rather than binding legislation, creating regulatory uncertainty and reliance on administrative discretion. Key challenges include the need for robust monitoring, reporting and verification systems, risks around credit integrity and double counting, and potential institutional fragmentation across climate governance bodies. For investors, confidence will ultimately depend on how quickly Nigeria strengthens the legal foundation of the market and demonstrates transparent, credible implementation.
Click here to download full report: CSL Nigeria Daily- 14 January 2026- Economy.pdf
