Kristalina Georgieva, the Managing Director of the International Monetary Fund, warned that Nigeria and other developing countries faced mounting pressure from rising debt-service costs, expensive borrowing and declining foreign financing.
She delivered the assessment at the conclusion of the G20 Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina. Georgieva outlined major risks confronting the global economy.
Georgieva noted that the debt situation in emerging and low-income countries had improved gradually in recent years. However, she said progress remained uneven and some nations still faced serious challenges.
She explained that high interest rates in advanced economies had made borrowing and refinancing more expensive for developing countries. At the same time, external financing available to many poorer nations had declined.
This combination limited the ability of these economies to finance development and respond to economic shocks.
Georgieva further stated that higher debt-service payments could leave governments with less money for essential areas. These included infrastructure, healthcare and education.
She pointed to a decline in official development assistance and reduced financing from non-Paris Club creditors as additional factors. These developments added to the funding squeeze facing low-income economies.
Georgieva added that countries whose debt burdens had become unsustainable needed faster and more decisive action to restore sustainability.
