Growing Debt Burdens Threaten Inclusive Growth in Developing Nations

On October 13, at the International Monetary Fund and World Bank annual meetings in Bangkok, Taiwo Oyedele, chair of the Group of 24 (G24) and Nigeria’s minister of finance, warned that mounting debt is a “major barrier” to inclusive growth for many developing economies. He noted that these countries are paying roughly $500 billion more for their debt than wealthier nations, straining fiscal balances and limiting resources for development.

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Oyedele linked the debt surge to several external shocks: ongoing war in the Middle East, a “super El Niño” that has driven food prices higher, and sharply increasing borrowing costs. These factors have amplified fiscal deficits across emerging markets, especially in Africa, and have reduced the capacity of governments to fund growth-oriented projects.

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The G24 called on the IMF and World Bank to expand “accessible and affordable concessional financing” for vulnerable states while encouraging private-capital mobilisation and public-spending restraint. Iyabo Masha, director of the G24 secretariat, said recent reforms to the sovereign-debt architecture should enable quicker resolutions of debt crises, citing Senegal’s progress toward a settlement with lenders and bondholders. She also warned that artificial-intelligence advances could widen the digital divide for countries lacking basic infrastructure.

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• Additional debt service cost for developing nations: ? $500 billion versus developed peers.

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• Senegal’s disputed debt was estimated at $13 billion, with negotiations aiming for an agreement by December.

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• The IMF recently lowered growth forecasts for Latin America and the Caribbean, noting limited benefit from the AI-driven energy-shock mitigation seen elsewhere.

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• “It is a concern that (AI) will widen the digital divide,” — Iyabo Masha, director of the G24 secretariat

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