National Telescope national telescope newspaper
By Ekpenyong Emmanuel
The United Nations Conference on Trade and Development (UNCTAD) has raised a red flag over the escalating debt crisis in developing countries, with Nigeria’s debt profile nearing ₦155 trillion by 2025.
This alarming projection is attributed to the government’s plan to borrow an additional ₦13 trillion to finance the deficit in the 2025 budget.
According to UNCTAD, developing countries’ external debt skyrocketed to a record $11.4 trillion in 2023, accounting for 99% of their export earnings.
This staggering debt burden is forcing governments to make difficult trade-offs, prioritizing debt servicing over essential infrastructure, education, and healthcare.
A whopping 3.3 billion people live in countries where debt servicing takes precedence over health or education.
UNCTAD Secretary-General Rebeca Grynspan emphasized the urgent need for reforms to prevent the debt crisis from derailing progress.
“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,” she said.
In Nigeria, the debt situation is particularly dire.
As of September 30, 2024, the country’s debt profile stood at ₦142.3 trillion, with a revenue-to-debt servicing ratio of 65%. However, the government has made some progress in reducing the revenue-to-debt service ratio from 97% to 65%.
The Central Bank of Nigeria’s latest data reveals a significant drop in debt service payments, from $540 million in January 2025 to $276 million in February 2025.
This decline is attributed to the government’s efforts to restructure its debt portfolio, improve dollar liquidity, and ease pressure on the foreign exchange market.
