The World Bank has warned that Nigeria and other developing countries risk entering debt crises due to rising interest rates and slowing global growth, noting that about 60 per cent of the poorest countries are already at high risk of debt distress or already in distress.
According to the World Bank in a report released on Wednesday, the poorest countries eligible to borrow from the World Bank’s International Development Association (IDA) now spend over a tenth of their export revenues to service their long-term public and publicly guaranteed external debt.
The report showed that Nigeria’s external debt was $18.8 billion in 2010, but rose to $76.2 billion last year. Analysts said, in 2010, $2.58 billion was obtained from International Monetary Fund (IMF) credit and Special Drawing Rights (SDR), against $9 billion in 2021.
It was learnt that at the end of 2021, the external debt of Nigeria and other low and middle-income economies totaled $9 trillion. This is more than double the amount a decade ago, according to the World Bank.
At the end of 2021, $46.2 billion debt-service payments on long-term public and publicly guaranteed external debt were tied to IDA-eligible countries, but the amount is projected to rise to $62 billion in 2022.
Nigeria, other developing nations at risk of debt crises – World Bank
