United Nations Deputy Secretary-General Amina Mohammed has urged global leaders to implement debt relief measures and sustainable financing solutions for Nigeria and other African nations struggling with mounting public debt.
Speaking at the 4th United Nations Economic and Social Council (UNECOSOC) International Conference on Financing for Development in Seville, Mohammed emphasized the urgent need to restructure Africa’s debt burden and create mechanisms that facilitate long-term economic stability.
The call became necessary as there is a rise in both local and global debts.
Nigeria’s Growing Debt Burden and Economic Challenges
Nigeria’s total public debt skyrocketed to N144.67 trillion ($94.23 billion) as of December 31, 2024, marking a 48.58% increase compared to N97.34 trillion ($108.23 billion) recorded in December 2023.
- According to a report from the Debt Management Office (DMO), debt rose 1.65% quarter-on-quarter, reaching N142.32 trillion ($88.89 billion) at the end of September 2024—a concerning trend that highlights Nigeria’s deepening fiscal challenges.
Mohammed reiterated the need for urgent debt relief, stating, “It’s time to lift the weight of unsustainable debt off Africa’s shoulders.”
She emphasized that addressing debt issues would unlock development finance and pave the way for meaningful progress in critical sectors.
IMF and UNECOSOC Leaders Call for Debt Reform
The International Monetary Fund (IMF) recently warned that global public debt may surpass 100% of GDP by 2030, urging emerging economies to implement stronger fiscal policies to stabilize their economies.
- The IMF projected that public debt would rise by 2.8% in 2025, pushing debt-to-GDP ratios above 95%, an alarming trajectory that could surpass pandemic-era debt levels by the end of the decade.
- At the UNECOSOC meeting, President Bob Rae advocated for a more affordable and inclusive debt architecture, stressing the need for governments to mobilize both public and private finance while leveraging diverse funding sources such as bilateral donors, Multilateral Development Banks (MDBs), and non-traditional financial institutions.
“To foster sustainable growth, we must mobilize public and private finance and leverage affordable funding from diverse actors—bilateral donors, Multilateral Development Banks, and non-traditional partners,” he said.
Nigeria’s Debt to the World Bank Rises Amid Key Sector Investments
Nigeria’s total debt to the World Bank grew by $2.36 billion in 2024, largely due to six newly approved loans targeting healthcare, rural infrastructure, governance, and fiscal reforms.
This pushed Nigeria’s total debt to the World Bank, from the International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD), from $15.45 billion in 2023 to $17.81 billion in 2024.
DMO data revealed that:
- Debt to IDA climbed from $14.96 billion to $16.56 billion.
- Loans from IBRD surged from $485.54 million to $1.24 billion, marking a 15.3% annual increase in Nigeria’s exposure to the World Bank.
The World Bank remains Nigeria’s most significant multilateral creditor, underscoring the country’s dependence on external financing for developmental projects.
What you should know
As of December 2024, external debt constituted 48.59% of Nigeria’s total public debt, while domestic debt made up 51.41%, indicating a relatively balanced debt structure.
- The continued increase in external borrowings suggests a growing reliance on foreign debt to bridge budgetary shortfalls.
- The breakdown of external debt shows that the Federal Government accounted for N62.92 trillion ($40.98 billion), while states and the FCT held N7.37 trillion ($4.80 billion).
Mohammed’s call for global debt restructuring aligns with broader efforts to reform international financing mechanisms and enable African economies to invest in sustainable growth.
As global stakeholders continue to deliberate on solutions, addressing Africa’s debt burden remains a crucial priority for international economic stability.