G-24 Director Explains High Borrowing Costs for Nigeria

Iyabo Masha, the director of G-24, addressed the high borrowing costs faced by developing nations, particularly Nigeria, during a question-and-answer session with journalists in Abuja. She highlighted that these countries often pay significantly higher interest rates compared to advanced economies due to weak revenue structures and high debt burdens, which limit their access to concessional financing from institutions like the IMF and World Bank.

Masha pointed out that research indicates developing countries may pay interest rates that are three to four times higher than those in advanced economies. She attributed this disparity to how large lenders assess risk, noting that a country's revenue-generating capacity plays a central role in determining interest rates.

Masha also mentioned that Nigeria does not currently qualify for debt relief due to its borrowing structure and ability to service obligations, which places it outside the category for distress economic intervention. She clarified that Nigeria's previous debt relief under former President Olusegun Obasanjo was part of a broader international program targeting heavily indebted nations.