According to the International Monetary Fund, Nigeria and other emerging economies with substantial foreign currency borrowings and external finance should prepare for future instability.
The International Monetary Fund (IMF) published a blog post titled “A Disrupted Global Recovery” that discussed its World Economic Outlook.
According to the Debt Management Office, Nigeria paid $520.78 million on external debt payments in the third quarter of 2021, up 74.2 percent from $298.9 million in the previous quarter (Q2 2021).
The increase in debt service is attributable to the country’s debt profile expanding significantly. In the third quarter of 2021, Nigeria’s external debt grew to $37.96 billion, up from $33.47 billion the previous quarter.
The country’s foreign debt increased as a result of a $4 billion Eurobond issued on the international debt market to boost the country’s external reserve over $40 billion.
According to the IMF, the recent shift in monetary policy stance might have a detrimental impact on emerging economies like Nigeria. “Economies will need to adapt to a global context of rising interest rates as monetary policy tightens more broadly this year. Emerging market and emerging countries with significant foreign currency borrowing and external finance needs should plan ahead for potential market instability by extending debt maturities as much as possible and minimizing currency mismatches.”
“In some circumstances, foreign exchange intervention and temporary capital flow control measures may be required to allow monetary policy to focus on domestic conditions,” the IMF stated.
According to the IMF, 60 percent of low-income nations that are either in or are at high risk of financial distress will find servicing their loans more difficult.
“The G20 Common Framework has to be reformed to provide debt restructuring more swiftly and G20 creditors and private creditors should suspend debt service while the restructurings are being discussed.” The IMF continued.
Africa, steeped in history, hides enigmatic ancient anomalies within its borders. From Egypt's awe-inspiring pyramids…
The Sahara Desert, a vast expanse of arid landscapes, seemingly inhospitable and barren, is not…
The Great Sphinx of Giza, an iconic monument with the body of a lion and…
The Great Mosque of Djenné, located in the city of Djenné in Mali, is an…
In today's digital age, social media has become an integral part of our lives. While…
In an increasingly globalized world, many individuals are considering the prospect of relocating abroad for…
This website uses cookies.