BY COBHAM NSA – The Minister of Finance and Coordinating Minister of the Economy, Wale Edun has challenged developing nations to build resilience against global economic shocks by leveraging existing buffers to navigate systemic breakdown and stay competitive.
He also believes effective implementation of targeted, temporary relief measures would protect vulnerable populations across borders by addressing specific humanitarian needs and fostering regional stability.
Edun, who threw the challenge at the G24 news conference held on the sidelines of the ongoing International Monetary Fund meeting in Washington, D.C, said countries must remain proactive in pursuing smart economic management rather than retreating from crucial reforms
Additionally, he warned that premature or excessive interest rate hikes could undermine ongoing economic reforms, while delayed policy responses risk fuelling inflation.
The Minister argued that developing-nation Central Banks are essential for navigating energy crises and geopolitical turmoil, noting also that policy responses vary across countries, particularly between oil-producing and oil-importing nations.
According to him, while countries like Nigeria may benefit from increased oil revenues, oil-importing countries face higher costs, but noted that both groups are still grappling with inflationary pressures stemming from energy markets.
A statement by Efe Ovuakporie, Head Information and Public Relations Unit in the Finance Ministry, said Mr Edun cautioned that even oil-exporting nations are not immune, as rising costs of gas, fertiliser, and food are being felt across economies, underscoring the far-reaching effects of the global energy crisis.
While stressing the importance of building economic resilience, the Minister tasked countries to utilise existing fiscal buffers and implement targeted, temporary relief measures for vulnerable populations, rather than reversing key reforms already in place.
He also warned against a return to subsidy regimes, insisting that reforms such as fuel subsidy removal and foreign exchange liberalisation have strengthened Nigeria’s economic framework despite recent external shocks.
Further tasking governments to prioritise support for the most vulnerable citizens, ensuring they can cope with rising living costs without jeopardising long-term structural reforms essential for sustainable growth, Mr Edun said positive oil price shocks could strengthen fiscal and external balances for exporting countries, creating room for responsible public investment.
He said disciplined macroeconomic management remains key and the adoption of hedging strategies by some countries to stabilise oil revenues are part of measures that enhance predictability and support long-term fiscal planning amid volatile global market conditions.
Noting that while developing countries continue to expect support from advanced economies, the Minister expressed concerns that declining overseas development assistance and rising debt servicing obligations are worsening their fiscal challenges.
In his assessment, the surge in debt servicing costs has outpaced foreign aid and investment in numerous developing countries, severely crippling fiscal space and undermining efforts for meaningful economic transformation.
As the G-24 Chair, Edun urged multilateral institutions, such as the IMF and World Bank, to scale up support and provide robust liquidity, arguing that heightened borrowing costs are crippling the ability of developing nations to transform their economies
On policy guidance to assist developing nations manage current economic pressures and financial vulnerabilities more effectively, Mr Edun identified domestic resource mobilisation as a more sustainable path forward, advocating improved tax systems and stronger private sector participation to boost revenue and reduce dependence on external financing.
The Finance Minister, while aggressively championing concessional financing and innovative risk management tools to slash borrowing costs, maintained that crippling debt servicing burdens remain the primary barrier to development and economic transformation in emerging economies.
He acknowledged the potential for near-term disparity, while also highlighting Artificial Intelligence (AI) as a transformative opportunity to enhance revenue administration through digital systems.
Similarly, Edun affirmed that maximizing Nigeria’s tax-to-GDP ratio requires leveraging AI-driven technologies to revolutionize revenue assurance, boost efficiency, and plug fiscal leakages.
He added that improving tax-to-Gross Domestic Product (GDP) ratios would depend significantly on adopting digital tools, including AI, to boost efficiency, transparency, overall revenue generation, and plug fiscal leakages.
Also disturbed by slowing global trade growth, the Minister noted that fragmentation and supply chain disruptions are prompting developing economies to focus more on domestic production and regional integration.
In her intervention, Director of the G-24 Secretariat, Iyabo Masha, said supply-side constraints, particularly in oil production, are responding weakly to monetary policy, even as she urged Central Banks to adopt a cautious, data-driven approach to decision-making.
For her, it is important that multilateral institutions intensify support, especially in reducing borrowing costs and addressing debt-related challenges.
Masha maintained that going forward, rules-based global trading system remains the cornerstone of inclusive economic growth.
