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The International Monetary Fund (IMF) has warned that Nigeria and other developing countries are facing mounting pressure from rising debt-service costs, expensive borrowing and declining foreign financing.
IMF Managing Director, Kristalina Georgieva, said the combination of high borrowing costs and reduced external funding was limiting the ability of many emerging and low-income economies to finance development and respond to economic shocks.
Georgieva spoke at the conclusion of the G20 Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina, where she outlined major risks confronting the global economy.
She said the debt situation in emerging and low-income countries had improved gradually in recent years, but progress remained uneven, with some countries still facing serious debt challenges.
According to her, the high interest rates prevailing in advanced economies have made it more expensive for developing countries to borrow and refinance existing obligations.
At the same time, external financing available to many poorer countries has declined, putting additional pressure on governments already struggling to meet growing financial needs.
The situation, she said, was particularly worrying because higher debt-service payments could leave governments with less money for essential areas such as infrastructure, healthcare and education.
Georgieva also pointed to a decline in official development assistance and reduced financing from non-Paris Club creditors as factors adding to the funding squeeze facing low-income economies.
She said countries whose debt burdens had become unsustainable needed faster and more decisive action to restore debt sustainability.
The IMF chief called for improvements in sovereign debt restructuring, stressing that countries should not be allowed to remain trapped for long periods in debt difficulties.
She also urged countries with sustainable debt positions to move faster with the IMF-World Bank Three-Pillar Approach, while strengthening domestic policies that can improve economic growth and government revenue.
Georgieva said developing countries needed to improve domestic revenue mobilisation and debt management, as well as create conditions capable of attracting more private investment.
For countries with limited public resources, she said private-sector investment would be increasingly important in closing financing gaps and supporting economic development.
The warning comes as global government debt continues to rise sharply. Georgieva said global public debt is now approaching 100 per cent of the world’s economic output and is expected to increase further.
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She noted that major economic shocks in recent years had repeatedly pushed government debt higher, but countries had struggled to bring the debt levels down after the shocks passed.
“Public debt—at almost 100 percent of GDP worldwide—now exceeds its post-World War II highs and is set to climb further,” she said.
Georgieva also warned that the global economy was facing several other risks, including an energy shock, stalled progress in reducing inflation and uncertainty over the impact of artificial intelligence on productivity and financial stability.
Despite these challenges, she said the global economy had shown greater resilience than expected, with the IMF projecting global growth of about three per cent in 2026.
However, she stressed that the improved growth outlook did not remove the risks facing individual economies, particularly vulnerable developing countries.
She said countries needed credible medium-term plans to put their public finances on a stronger footing, while central banks should remain focused on maintaining price stability.
The IMF chief also called for structural reforms to remove barriers to investment and economic activity, arguing that stronger growth would make it easier for governments to manage their debts.
She warned that widening economic imbalances between countries could create additional risks for global trade and financial stability.
According to the IMF, excessive global imbalances increased by 0.7 per cent of global GDP in 2025, the largest increase in a decade.
Georgieva said such imbalances could fuel trade tensions and allow economic shocks to spread more quickly across countries.
She called on both surplus and deficit economies to take steps to correct the imbalances, including encouraging domestic consumption and investment in surplus countries and strengthening public finances in economies running large deficits.
For developing countries, the IMF’s message is that stronger growth must go hand in hand with better debt management, increased domestic revenue and greater access to financing.
Georgieva stressed that international cooperation would remain essential, particularly for countries struggling with unsustainable debt and shrinking sources of external funding.
The IMF said it would continue working with member countries and other international institutions to strengthen debt management, improve economic data and support efforts to address global economic imbalances.
