The International Monetary Fund (IMF) has warned that Nigeria and other developing economies are coming under increasing financial pressure as debt-servicing costs rise, borrowing becomes more expensive and access to foreign financing weakens.

IMF Managing Director, Kristalina Georgieva, said the combination of elevated global interest rates and declining external funding was constraining the ability of emerging and low-income countries to finance development projects and withstand economic shocks.

Georgieva raised the concerns at the conclusion of the G20 Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina, where she highlighted debt vulnerabilities and other threats to the global economy.

According to her, although debt conditions in emerging and low-income economies have improved gradually in recent years, the recovery has been uneven, leaving several countries with significant debt challenges.

She explained that high interest rates in advanced economies had increased the cost of borrowing and refinancing for developing countries, while the supply of external financing had simultaneously declined.

The IMF chief warned that the resulting debt-service burden could force governments to divert scarce resources away from critical sectors, including healthcare, education and infrastructure.

She also identified declining official development assistance and reduced financing from non-Paris Club creditors as additional pressures worsening the funding gap confronting low-income economies.

Georgieva called for faster and more decisive measures for countries whose debt burdens have become unsustainable, stressing the need to improve sovereign debt restructuring mechanisms and prevent prolonged periods of financial distress.

She further urged countries with sustainable debt positions to accelerate implementation of the IMF-World Bank Three-Pillar Approach, while pursuing domestic reforms capable of strengthening economic growth and government revenues.

The IMF chief said developing countries must place greater emphasis on domestic revenue mobilisation and prudent debt management, while creating an environment that attracts private-sector investment.

She noted that private capital would become increasingly important for countries with limited public resources as governments seek alternative sources of funding to close development financing gaps.

The warning comes against the backdrop of a broader surge in global public debt.

Georgieva said global public debt is approaching 100 per cent of world GDP and is expected to rise further, with governments yet to fully reverse the accumulation of debt triggered by successive global economic shocks.

“Public debt—at almost 100 percent of GDP worldwide—now exceeds its post-World War II highs and is set to climb further,” she said.

Beyond debt, the IMF chief identified several risks to the global outlook, including potential energy shocks, stalled progress on disinflation and uncertainty surrounding the impact of artificial intelligence on productivity and financial stability.

Despite the challenges, Georgieva said the global economy had demonstrated stronger-than-expected resilience, with the IMF projecting global growth of about three per cent in 2026.

She, however, cautioned that a relatively stable global growth outlook would not shield vulnerable developing economies from their own fiscal and financing pressures.

Georgieva urged governments to adopt credible medium-term fiscal strategies to strengthen public finances, while central banks should remain focused on maintaining price stability.

She also called for structural reforms to remove barriers to investment and economic activity, arguing that stronger and more sustainable economic growth would improve governments’ capacity to service and reduce their debts.

The IMF further warned that widening economic imbalances between countries could aggravate trade tensions and increase the speed at which financial and economic shocks spread globally.

According to the Fund, global imbalances widened by 0.7 per cent of global GDP in 2025, marking their largest increase in a decade.

Georgieva called on both surplus and deficit economies to address the disparities, including by encouraging stronger domestic consumption and investment in surplus economies and improving public finances in countries running large external deficits.

For Nigeria and other developing economies, the IMF’s warning underscores the growing importance of strengthening domestic revenue, improving debt management, attracting private investment and securing sustainable sources of development financing.

The Fund maintained that international cooperation would remain critical, particularly for countries facing unsustainable debt burdens and shrinking access to external funding.

It said it would continue working with member countries and international institutions to strengthen debt management, improve economic data and support measures aimed at reducing global economic imbalances.