The World Bank don dey sound alarm on the increasing debt burden wey dey face 26 of the poorest economies around the world. According to a recent report, debt-service payments by these countries on their public and publicly guaranteed debts go rise by 35% to over $62 billion this year.
This rise dey come because of the extra costs of the Covid-19 pandemic and the sharp increase in food import costs. The World Bank dey worry say these debt-service payments dey take away scarce fiscal resources from important areas like health, education, social assistance, and infrastructure investment.
World Bank President, David Malpass, talk say the debt crisis wey developing countries dey face don intensify. He say, “A comprehensive approach is needed to reduce debt, increase transparency, and facilitate swifter restructuring – so countries can focus on spending that supports growth and reduces poverty.”
Malpass add say without this approach, many countries and their governments go face fiscal crisis and political instability, with millions of people falling into poverty. At the end of 2021, the debt stock of low- and middle-income countries rise 5.6% to $9 trillion, with International Development Association (IDA) countries owing nearly $1 trillion.
The report also mention say payments scheduled for 2023 and 2024 likely go remain high because of high-interest rates, maturing principal, and the compounding of interest on Debt Service Suspension Initiative deferrals.
