G24 Warns Debt Payments Are Draining Developing Economies as Aid Falls

COLOMBO (News 1st); The Intergovernmental Group of Twenty-Four (G24) has urged wealthier nations and multilateral development institutions to step up support for developing countries struggling with the economic fallout of the ongoing conflict in the Middle East, while stressing that domestic resource mobilisation remains critical for long-term resilience.

Responding to a question from News 1st's Zulfick Farzan, G24 Chair and Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Olawale Edun, said it was natural for stronger economies to assist weaker nations during periods of global stress.

However, he cautioned that current global conditions are marked by declining overseas development assistance and net financial outflows from developing economies.

Edun noted that developing countries are facing heavy pressure from high debt-servicing costs, which now outweigh the financial inflows they receive. He said debt servicing by developing countries in 2024 amounted to approximately US$163 billion, far exceeding overseas development assistance of about US$47 billion, even before accounting for foreign direct investment. As a result, elevated interest costs have driven a net outflow of resources from emerging and developing economies.

While calling on advanced economies and multilateral development institutions to provide stronger support, including liquidity assistance and policy leadership, Edun emphasized that external support alone is not sufficient. He said countries must place greater emphasis on self-reliance through domestic resource mobilisation as a sustainable path forward.

Citing Nigeria’s experience, Edun said his government introduced a comprehensive tax regime that improved revenue collection while simultaneously reducing the tax burden on the lowest-income earners, both at the individual and government levels. He described such reforms as essential examples of how public and private sectors can work together to strengthen domestic capacity.

Edun stressed that self-help, domestic resource mobilisation and private-sector participation are key not only to weathering the current shock but also to supporting long-term economic growth, investment and poverty reduction in developing nations.