The International Monetary Fund (IMF) has urged countries to prioritise reducing their debt levels, warning that excessive debt suffocates economies.
The Managing Director, Kristalina Georgieva, gave the advice on Monday, October 13 during the civil society organisation (CSO) town hall at the ongoing annual meetings of the World Bank and IMF.
She said countries can bolster resilience and withstand risks if they prioritise reducing their debt burdens.
“The consequences are that we have to be much more focused on bringing debt levels down, because a very high level of debt suffocates economies.
READ ALSO: Two GenCos Grow Revenue to ₦439.97bn in 9 Months
“Although ironically, debt levels in advanced economies are still going up, debt levels in emerging markets are still going up,” Georgieva said.
Pinnacle Daily reports that Nigeria faces an increasing debt burden, losing control and putting fiscal pressure on its economy.
In its latest disclosure, the Debt Management Office (DMO) revealed that Nigeria’s total public debt increased to N152.39 trillion as of June 30.
It said the total domestic debt stood at N80.55 trillion ($52.67 billion), while the external debt was at N71.84 trillion ($46.98 billion).
The World Bank classifies Nigeria as a lower-middle-income economy.
READ ALSO: NAICOM Calls for Regional Insurance Collaboration to Bridge Climate Finance Gap
The IMF director noted that in low-income economies, debt levels are declining, blaming it on the country’s lack of access to finance.
She, however, pointed out further that low-income countries are struggling to manage their debt burdens.
“And even if they’re going down, it is still incredibly difficult for low-income countries to cope with these levels of debt,” Georgieva added.
She hinted that the IMF is focusing on policies aimed at reducing debt levels.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
