The United Nations Conference on Trade and Development (UNCTAD) has warned that countries, particularly developing nations, are being overwhelmed by mounting debt.
In 2023, external debt among developing countries surged to a record $11.4 trillion, equating to 99% of their export earnings.
Meanwhile, Nigeria’s total debt is projected to exceed N155 trillion by 2025, as the government plans to borrow an additional N13 trillion to cover the budget deficit.
As of September 30, 2024, Nigeria’s debt stood at N142.3 trillion, according to the Debt Management Office (DMO), with a concerning revenue-to-debt servicing ratio of 65%.
UNCTAD highlighted that rather than investing in critical sectors such as infrastructure, education, and healthcare, governments are being forced into tough financial decisions due to rising debt burdens.
The organisation noted that approximately 3.3 billion people currently live in countries where debt servicing costs outweigh spending on either health or education.
Speaking at the 14th International Debt Management Conference in Geneva, Switzerland, held from March 17 to 19, 2025, UNCTAD Secretary-General Rebeca Grynspan called for urgent reforms to prevent the escalating debt crisis from hindering global progress.
She said, “Behind us lies a system that needs reform; before us, the chance to build one that serves people and stability, long-term development, not recurring default.
“Interest payments outweigh climate investments in almost all developing countries, limiting their ability to respond to global challenges.
“This forces countries to choose to default on their development in order not to default on their debt. No more defaults on debt but yes on development.”
As the world prepares for the 4th International Conference on Financing for Development later this year, the biennial debt conference lays the groundwork for tangible solutions to alleviate debt distress while safeguarding sustainable development.
The key takeaway from the 14th International Debt Management Conference was clear: Urgent reforms are needed to transform debt into a catalyst for progress rather than a hindrance.
Through global cooperation and innovative strategies, countries can break free from the cycle of unsustainable debt and invest in a more resilient and inclusive future.
Nigeria is making strides in addressing its debt challenges. For years, the country allocated a significant portion of its annual revenue—up to 97%—to debt servicing, constraining economic growth and development.
However, under the current administration, Nigeria has reduced its revenue-to-debt service ratio from 97% to 65%. According to the latest data from the Central Bank of Nigeria (CBN), total debt service payments fell sharply from $540 million in January 2025 to $276 million in February 2025.
This decline reflects the federal government’s ongoing efforts to restructure its debt portfolio, enhance dollar liquidity, and ease pressure on the foreign exchange market.
