BY Onu Okorie

Developing countries are facing mounting pressure to create jobs, expand infrastructure and improve living standards as rising debt-servicing costs consume resources needed for economic development, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has warned.
Oyedele, who chairs the Group of 24 (G24), said developing nations were paying about $500 billion more for their debt than developed countries, highlighting the widening financial burden confronting emerging economies.
He spoke on Tuesday at the annual meetings of the International Monetary Fund (IMF) and the World Bank in Bangkok, Thailand, where developing countries called for more affordable financing to address growing fiscal pressures.
The minister said the combination of high debt levels and expensive borrowing was undermining efforts by developing economies, particularly those in Africa, to achieve inclusive growth and create jobs.
“What we have seen by members of the G24 and across particularly the developing countries such as those in Africa, is an increasing body of not just high debts, but high costs of debts,” Oyedele said.
The warning comes as developing countries grapple with rising borrowing costs, growing fiscal deficits and external shocks that have increased pressure on government finances.
The ongoing conflict in the Middle East has disrupted global economic conditions, while rising food prices linked to a projected super El Niño weather phenomenon have added to the challenges confronting vulnerable economies.
According to Oyedele, these pressures threaten progress towards economic transformation that delivers jobs and spreads the benefits of growth across society.
For many developing countries, the growing cost of servicing debt leaves governments with fewer resources to invest in critical sectors such as healthcare, education, infrastructure and productive industries.
Director of the G24 Secretariat, Iyabo Masha, said debt obligations were restricting countries’ capacity to finance further development.
“Debt is something that restrains growth, because countries then do not have enough resources to finance further growth, or they are spending most of their resources just paying off the debt,” she said.
The G24, a bloc of emerging and developing economies, urged the IMF and World Bank to expand access to affordable concessional financing to help vulnerable countries manage immediate financial pressures.
The group also called for greater mobilisation of private capital and measures to reduce public spending pressures as governments seek to restore fiscal stability.
Masha, however, expressed optimism that recent improvements to the international sovereign debt architecture could help countries resolve debt crises more quickly.
She cited Senegal as an example, saying the country was close to reaching a final resolution with its creditors.
Beyond debt sustainability, developing economies also face the risk of falling further behind in the global adoption of artificial intelligence (AI).
Masha warned that unequal access to AI technologies could widen the digital divide between advanced economies and countries still struggling to establish the infrastructure required for digital transformation.
“It is a concern that (AI) will widen the digital divide,” she said, adding that countries with limited technological development risk starting from scratch while others continue to benefit from rapid advances in AI.
She noted that access to reliable electricity would be among the factors determining whether developing countries could benefit from the technology.
The concerns underscore the multiple challenges confronting developing economies as they attempt to balance debt repayment, economic stability and investment in future growth.
For African countries in particular, the call for more affordable financing reflects growing concerns that the cost of borrowing could limit governments’ ability to deliver development programmes and create employment opportunities at a time of heightened global economic uncertainty.