Nigeria's Finance Minister and G-24 Director Voice Concerns on High Borrowing Costs

Nigeria’s Finance Minister, Taiwo Oyedele, raised alarms on Tuesday about the expensive borrowing rates facing developing countries. He made these comments as chair of the Group of 24 Nations (G-24).

Mr Oyedele pointed out that high debt levels in many developing countries stop them from growing fairly. He spoke during the annual meetings of the International Monetary Fund and World Bank held in Bangkok, Thailand.

He noted that developing nations are paying about $500 billion more in debt service than developed countries. This situation worsens as these economies deal with increasing budget deficits.

“What we have seen by members of the G24 and across, particularly the developing countries such as those in Africa, is an increasing body of not just high debts, but high costs of debts,” he said.

This year, developing economies faced serious challenges. They are dealing with supply issues from the ongoing war in the Middle East, rising food prices due to a “super El Niño,” and high borrowing costs.

“These developments impact emerging markets and developing economies’ progress towards achieving inclusive and job-rich economic transformation,” Mr Oyedele said.

After their meetings, G-24 members called on the IMF and World Bank to provide easier and cheaper loans to vulnerable countries soon.

Iyabo Masha, who is the director of the G-24 Secretariat, also shared her concerns about borrowing costs for developing nations.

“Debt is something that restrains growth, because countries then do not have enough resources to finance further growth, or they are spending most of their resources just paying off the debt,” she said.

She acknowledged that some countries have done better in managing their debt and restructuring it. She mentioned Senegal as an example, saying it is close to resolving its debt issues with creditors.

That could be a model for other countries to quickly solve their debt problems, she explained.