Nigeria, China and other countries contributed to the Global debt that stands at $188 trillion, the International Monetary Fund (IMF) disclosed.
The IMF, in its new update on World Debt, disclosed that the global average debt to Gross Domestic Product (GDP) ratio weighted by each country’s GDP reached 226% in 2018, 1.5% higher than what was recorded in 2017.
“Although this was the smallest annual increase in the global debt ratio since 2004, a closer look at the country-by-country data reveals rising vulnerabilities, suggesting that many countries may be ill-prepared for the next downturn,” stated IMF Update.
According to the IMF, the average debt ratio declined in advanced economies but with no significant reduction in debt.
“In emerging market economies and low-income developing countries, the average debt ratios rose further. Notably, China’s total debt ratio reached 258 per cent of GDP at end-2018 the same as the United States and nearing the average for advanced economies, which was 265%,” it stated in Punch.
Nigeria’s total public debt, which stood at N21.73 trillion as of December 31, 2017, rose to N24.39 trillion at the end of 2018, according to data from the Debt Management Office. It increased to N25.7 trillion as of June 30, 2019.
Nigeria is categorised by the IMF as a low-income developing country. The LIDCs are a group of 59 IMF member countries primarily defined by income per capita level below a certain threshold (set at $2,700 in 2016).
Meanwhile, the DMO had earlier said that the country’s debt service/revenue for 2017 and 2018 were 57% and 51% respectively, adding that the debt service figures had grown as a result of the increase in the debt stock and relatively high domestic interest rates.
“Still on the issue of debt sustainability, when compared to a number of countries, Nigeria’s debt/GDP is relatively low but the debt service/revenue is relatively high, the average public debt ratio increased by more than 2.5% points in sub-Saharan Africa,” IMF Update Report.