According to the World Bank Group, public debt in Nigeria and other low and middle-income countries has reached a 50-year high, amounting to more than 200 percent of government revenues.
The Washington-based bank stated this in a new report titled “Raising the Bar on Debt Transparency” that with the pandemic-induced economic slowdown, the impact of the war in Ukraine, and the rise in interest rates, many countries were facing severe challenges in servicing their debts.
The report read, “Total public debt stands at an alarming 50-year high in low- and middle-income economies, the equivalent of more than 200 percent of government revenues.”
According to the World Bank’s recent International Debt Statistics 2022 report, as a result of COVID-19, the external debt burden of the world’s low-income countries rose by 12 percent to a record $860 billion in 2020 —the fastest accumulation since World War II.
According to the report, despite the unprecedented debt burden many governments faced, the extent of their public debt liabilities was often hard to quantify. The report further said that many low- and middle-income countries would not disclose timely debt data or, at times, published incomplete data that understated the true level of liabilities.
Global surveillance was also hampered by the opacity of several domestic debt markets, the increased use of central bank repurchase agreements or currency swaps that were not included in government debt statistics, and the proliferation of borrowing by state-owned and private sector entities with an explicit or implicit government guarantee, it noted.
The report further said that debt transparency was critical for attaining sustainable financing and achieving macro-financial stability. It noted that it would facilitate new high-quality investment, reduce corruption, and instill accountability.
The report stressed that comprehensive debt data would enhance the international community’s ability to help avoid debt crises or support countries.
“Raising the Bar on Debt Data Transparency’ was the subject of a recent panel discussion, co-hosted by the World Bank Group Chief Economist and the Executive Director for Japan at the World Bank. The event brought together a panel of experts from borrower and creditor countries, academia, and the World Bank, who discussed ongoing efforts and concrete actions to support debt data transparency,” it said.