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Recently, President Muhammadu Buhari criticised the international financial system for burdening the world’s most vulnerable nations with unmanageable levels of external debt. The President, who spoke at the recent United Nations Conference of Least Developed Countries in Doha, Qatar, advised that developed and developing countries should be given duty-free and quota-free market access for their goods in order to ensure that products from the 46 least-developed countries are integrated into regional and global value chains.
The President also reiterated that such debt burden on developing economies would make it extremely hard for them to meet the 17 items listed in the Sustainable Development Goals (SDGs) 2030 Agenda. The United Nations Secretary-General, Antonio Guterres, has also described the global financial system as an “unfair debt architecture that not only charges poor countries much more money to borrow on the market than advanced economies, but downgrades them when they even think of restructuring their debt or applying for debt relief.”
There is urgent need for global action to reverse the inimical trend that does not augur well for development and world peace. In 2015, the United Nations (UN) endorsed the SDGs Agenda. The inauguration of the programme, which required all world leaders to be fully committed to achieve its goals, coincided with the emergence of the Buhari government. However, eight years on, and seven years for the programme to run its full course, the SDGs goals have not been fully realised in most countries, especially in the least developed countries.
The outbreak of the COVID-19 pandemic in 2020 and the ongoing war between Russian and Ukraine have been cited as reasons for not realising the lofty objectives of the SDGs in many developing countries. No doubt, the developing countries need urgent assistance that will accelerate their economic development. They should be helped to build a resilient economy that can withstand external shocks arising from their rising debts.
The assistance can be provided within the framework of the Doha Programme of Action designed to help the Least Developed Countries to exit external debt trap. The civil society organisations, the private sector and the business communities should work with governments in these countries to provide the necessary funds and resources that will quicken the realisation of the SDGs agenda. The governments of the least developed countries should muster the political will to address their own domestic challenges instead of waiting for external assistance.
We believe that the least developed countries have not really helped themselves in the area of external debt burden. The call for debt restructuring and forgiveness will amount to nothing if these countries fail to prudently manage their resources. It is unfortunate that most of the developing countries have either misappropriated or misapplied the borrowed funds. In Nigeria, the rising cost of governance and the mismanagement of resources have increased the debt burden. This includes debt from the World Bank, the International Monetary Fund (IMF) and the African Development Bank (AfDB).
Currently, Nigeria’s debt stock is projected to hit N77trillion by end of May 2023. This includes the N22.7trillion Ways and Means (W&M) from the Central Bank of Nigeria (CBN). The rising debt in the least developed countries has warranted the reformation of the international financial system.
However, the developing economies should look inwards to solve their problems. At present, corruption and poor governance system are hampering development in the least developed countries. Unfortunately, corruption has become endemic in Ministries Departments and Agencies (MDAs) that ought to be the engine of policy formulation and implementation in Nigeria. That is why many developing countries are at the bottom rung of the key indices of economic development. Let the least developed countries improve their Ease of Doing Business in order to attract investment inflows. Of critical importance is the need to monitor illicit financial flows and engender support for the UN international convention on tax matters. This will help to eliminate profiteering, unhealthy capital gains and other abuses that hinder the achievement of many policy initiatives.
Similarly, attention should also be focused on challenges such as climate change, and measures that will curtail rising temperatures in sea levels, flooding, drought and desertification. In all, adequate budgetary provision must be made for education, health, environment, and others. Having good governance in these countries will go a long way in addressing their debt challenge.
