Kindly Share This Story:

By Peter Egwuatu

Emerging and developing economies (EMDEs), including Nigeria, have accumulated debts to the tune of $55 trillion as at end 2018, marking an eight-year surge that has been the largest, fastest, and most broad-based in nearly five decades, the World Bank said yesterday.

The new World Bank Group study has urged policymakers to act promptly to strengthen their economic policies and make them less vulnerable to financial shocks.

Nigeria’s public debt has surged by 129.5 percent or N14.5 trillion in the last five years, to N25.7 trillion as at the end of June 2019 from N11.2 trillion as at the end of December 2014.

The breakdown of the public debt for the period June 2019, according to the Debt Management Office, DMO show that the external debt accounts for 32.38 percent or N8.3 trillion, with the Federal Government accounting for 27.29 percent of that portion.

Meanwhile, the Word Bank Group study analysis released yesterday as contained in Global Waves of Debt show comprehensive study of the four major episodes of debt accumulation that have occurred in more than 100 countries since 1970.

The World Bank study found that the debt-to-Gross Domestic Product, GDP ratio of developing countries has climbed 54 percentage points to 168 percent since the debt build up began in 2010.

“ On average, that ratio has risen by about seven percentage points a year—nearly three times as fast it did during the Latin America debt crisis of the 1970s. The increase, moreover, has been exceptionally broad-based—involving government as well as private debt, and observable in virtually all regions across the world.

“The size, speed, and breadth of the latest debt wave should concern us all,” said World Bank Group President David Malpass.

“It underscores why debt management and transparency need to be top priorities for policymakers—so they can increase growth and investment and ensure that the debt they take on contributes to better development outcomes for the people”, it noted.

According to the report, the prevalence of historically low global interest rates mitigates the risk of a crisis for now.

Vanguard

Kindly Share This Story: