By George Ozalla
Finance Minister Wale Edun has sounded the alarm over rising debt distress in developing countries and urged concerted global action to avert a full‑blown crisis, saying the situation demands urgent policy responses ahead of worsening economic prospects. Addressing delegates at the Group of Twenty‑Four on International Monetary Affairs and Development meeting in Abuja, Edun said the pace at which public debt has escalated in low‑income countries is outstripping economic growth and revenue mobilisation, placing a heavy strain on already stretched budgets.
Edun said almost half of low‑income countries are either in debt distress or at high risk of slipping into it, with debt servicing costs now consuming a growing share of national resources at the expense of investment in health, education and infrastructure. He said external revenue flows such as development assistance and foreign direct investment are no longer sufficient to cover rising interest payments, calling for innovative approaches to debt management and enhanced cooperation between creditor nations and debtor states.
The minister highlighted that about a quarter of emerging and developing economies have lost access to international capital markets, forcing governments to rely more heavily on domestic revenue. This, he said, underscores the need to strengthen domestic tax systems, broaden the tax base and improve public financial management to create sustainable fiscal space.
Edun also appealed to multilateral institutions and partner countries to accelerate efforts to reform the global financial architecture, particularly debt restructuring frameworks, to ensure they are more responsive to the needs of vulnerable economies. He said without such reforms, many countries will struggle to finance key development priorities and could face prolonged periods of stagnation.
Speaking at the same meeting, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, underscored the importance of modernising cross‑border payment systems, describing them as slow, costly and fragmented. Cardoso said adopting digital solutions could reduce transaction costs, enhance financial inclusion and support small and medium enterprises, which are vital drivers of growth and employment.
The warning from Nigeria’s finance chief came as global financial conditions tighten and interest rates remain elevated in major economies, increasing the cost of borrowing for poorer nations. Edun said this global backdrop makes it all the more important for developing countries to build fiscal resilience, pursue sound macroeconomic policies and deepen regional cooperation. He called on partnering countries and international financial institutions to work with debt‑distressed nations to find practical and fair solutions that preserve growth prospects.
Observers say Edun’s appeal at the G‑24 meeting reflects a growing consensus among policymakers that without urgent collective action, the mounting debt burden could reverse hard‑won gains in poverty reduction and sustainable development. Government officials, economists and development partners are now expected to take up the challenge of translating Edun’s call into workable strategies that can help stabilise finances and support long‑term growth.
Finance Minister Wale Edun has served in key economic roles at home and abroad, bringing decades of experience in public finance and economic policy. The Group of Twenty‑Four on International Monetary Affairs and Development is a coalition of developing countries that seeks to coordinate positions on major international economic and financial issues to enhance growth and development for its members.
