Business & Economy

World Bank Reveals Nigeria, Others Spent $443.5Bn On Debt Service In 2022

World Bank has revealed that Nigeria and 121 other developing countries spent around $443.5 billion in servicing public external debt in 2022.

BrandNewsDay understands that these countries are cut across Latin America, North Africa, Sub-Saharan Africa, Europe, and East and Central Asia.

The report titled “International Debt Report 2023” states that the poorest countries of the world face a debt crisis as borrowing costs surge due to interest rate hikes by the United States and Europe.

Advertisement

Speaking on the report, the World Bank’s Chief Economist and Vice President, Indermit Gill noted that “Record debt levels and high interest rates have set many countries on a path to crisis,”

Ghana 2022 defaulted on its debt obligation and just this week, it was reported Ethiopia will default on its debt obligation to creditors.

The report warned that around 60% of low-income countries are at risk of debt distress or probably debt distressed already.

Advertisement

It further noted that the number of sovereign debt defaults in developing countries in the past three years was greater than defaults witnessed in the last two decades.

According to the report, payment of debt service increased by 5% in the previous year and the 75 poorest countries of the world paid $88.9 billion for debt service in 2022.

The report noted that the expenditure debt service in these countries was more than the funds allocated to critical development sectors like health, education and environment.

Advertisement

For example, Nigeria 2022 spent around N5.65 trillion in debt servicing while its total education and health expenditures stood at N875.93 billion and N821.5 billion respectively.

The 2024 debt outlook for the poorest 24 countries in the world is even worse as debt service among these countries is expected to rise by 39% in 2023 and 2024.

The World Bank’s V.P. said of the increasing debt service, “Every quarter that interest rates stay high results in more developing countries becoming distressed—and facing the difficult choice of servicing their public debts or investing in public health, education, and infrastructure.”

Advertisement

The cause of this gloomy fiscal outlook for these developing countries could be attributed to a strong U.S. dollar and a drop in export earnings.

The naira for example has lost over 50% in its value since June making it more expensive to service external USD-denominated loans.

Facebook Comments
Advertisement
Adebayo

Adebayo is a Content Developer and website manager who loves to learn, unlearn and relearn. He has a knack for exploring the tech world. He is always thirsty to learn as the tech ecosystem evolves every day.

Recent Posts

Apple Unveils iPhone 17 Air, Slick, Slimmer Than Previous Models (PHOTOS)

Apple Inc is set to present a slimmer iPhone 17 Air model, marking a potential…

2 weeks ago

Six-Year-Old Ella Shoots, Kills American Police Officer In Mother’s Defense

A six-year-old girl, Ella, fatally shot a 28-year-old American police officer last month after witnessing…

2 weeks ago

LIRS Urges Taxpayers To Meet March 31 Deadline For Annual Tax Return Submission

The Lagos State Internal Revenue Service (LIRS) reminds all individual taxpayers, including self-employed individuals, those…

2 weeks ago

Stanbic IBTC Bank Partners Autochek To Boosts Car Ownership, Disburses N4Bn

Stanbic IBTC Bank, a prominent financial institution in Nigeria, has partnered with Autochek, an innovative…

3 weeks ago

Stanbic IBTC PMI®: Output Growth Accelerates To Fastest In Just Over One Year

The headline figure derived from the survey is the Stanbic IBTC PMI® - Purchasing Managers’…

3 weeks ago

Stanbic IBTC Bank Reintroduces Its Private Banking Offerings To Empower Nigerians Build Lasting Wealth

Stanbic IBTC Bank, a subsidiary of Stanbic IBTC Holdings and a leading financial service solutions…

3 weeks ago

This website uses cookies.