By Emmanuella Oghenetega
ActionAid Nigeria, a social justice non-governmental organisation has called for the urgent reform of the global financial architecture, as the country remains trapped in a debt cycle that limits its ability to invest in infrastructures and Gender Responsive Public Service delivery, as well as climate adaptation.
According to a statement signed by Andrew Mamedu, Country Director, ActionAid Nigeria, Nigeria’s total external debt now stands at $51.95 billion (including $7.87 billion owed to the IMF), resulting to spending 60.2% of its national revenue on debt servicing, while critical sectors such as healthcare and education receive significantly less funding.
“As of today, Nigeria ranks 152nd out of 187 in global climate vulnerability, making it one of the most at-risk nations. Yet, instead of receiving adequate financial support to combat the climate crisis, Nigeria continues to pay more to creditors than it receives from climate finance.
The statement revealed, that Historically, major emitters such as the United States, countries within the European Union, the United Kingdom, and other nations in the Global North, responsible for majority of global emissions owe an estimated debt of $9.9 trillion to Nigeria under mid-range calculations.”
“However, rather than honoring their obligations, these nations continue to push Nigeria and other African countries further into debt through high-interest loans. While African countries face an average interest rate of 9.8% on loans, Germany enjoys a mere 0.8%—a glaring injustice that perpetuates economic inequality and stifles development.
“This debt continues to grow as emissions persist, worsening climate impacts for countries like Nigeria that contributed the least to global warming.
“By 2050, countries in the global north will owe a staggering $192 trillion in climate debt to the Global South, yet only a fraction of this has been acknowledged, let alone repaid.
“Africa’s share of this climate compensation is in the tens of trillions of dollars, but instead of receiving compensation, African countries are forced to pay billions in debt servicing each year.”
According to the ActionAid Country director, the International Monetary Fund (IMF) continues to extract repayments while offering few meaningful solutions, worsening the economic squeeze. Meanwhile, climate change worsens food insecurity, displaces communities, and increases disaster recovery costs that should be covered by the world’s biggest polluters.
This is the most inopportune time for USAID to withdraw its aid and funding from African countries. Withdrawing support now would only deepen these crises. Instead, USAID must reinforce its support, ensuring African nations have the resources to achieve sustainable development and climate resilience.
“As we enter 2025, over half of the low and lower-middle income countries in Africa are either in debt crisis or at high risk of a debt crisis – and all but one of the remaining countries are at moderate risk of a debt crisis. As we enter the African Union Year of Reparations, we must demand debt cancellation and a transformation in the colonial debt architecture.” Andrew Mamedu, Country Director of ActionAid Nigeria said.
