IMF says Nigeria, others raised global debt to $188tn
Washington-based International Monetary Fund (IMF) announced on Tuesday that total global debts soared by $3 trillion to $188 trillion by December 31, 2018 as Nigeria, China and other countries increased their debt burden.
The organisation disclosed that a new review of its Global Debt Database revealed the global average debt-to-GDP ratio climbed up to 226 % in 2018, 1.5% higher than that of the year before.
It noted, “Although this was the smallest annual increase in the global debt ratio since 2004, a closer look at the country-by-country data reveals rising vulnerabilities, suggesting that many countries may be ill-prepared for the next downturn.”
However, the average debt ratio dipped in developed countries despite the fact that there no obvious indications regarding moves to reduce the debt.
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The IMF observed, that “In emerging market economies and low-income developing countries, the average debt ratios rose further.
“Notably, China’s total debt ratio reached 258 per cent of GDP at end-2018 — the same as the United States and nearing the average for advanced economies, which was 265 per cent.”
Nigeria, according to the IMF classification, is a Low-Income Developing Country (LIDC). The LIDCs comprise 59 IMF member countries characterised by income per capita level below a particular threshold ($2,700 in 2016).
According to data gleaned from the Debt Management Office (DMO), Nigeria’s total public debt was N21.7 trillion as of end of December 2017, and climbed up to N24.39 trillion at 31 December, 2018, then increased to N25.7 trillion as of 30 June, 2019.
Only last week, the DMO revealed that Nigeria’s debt service/revenue for 2017 was 57% while that of 2018 stood at 51%. It equally stated that debt service figures had skyrocketed owing to increase in debt stock and reasonably high domestic interest rates.
“Still on the issue of debt sustainability, when compared to a number of countries, Nigeria’s debt/GDP is relatively low but the debt service/revenue is relatively high,” it stated.
The IMF expressed a worrisome concern about the increasing trend in the total debt ratio, which it said showed no sign of halting or slowing in the emerging economies and LIDCs with the main increase coming from public debt.
The IMF said: “The average public debt ratio increased by more than 2½ percentage points in sub-Saharan Africa.”
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