At G20 Summit, IMF seeks predictable debt restructurings

The International Monetary Fund (IMF) on Sunday urged G20 leaders to accelerate efforts to deliver quicker and more predictable debt restructurings. Managing Director Kristalina Georgieva spoke at the G20 Leaders’ Summit in Johannesburg, South Africa — the first ever held on African soil – warned that sluggish global growth and mounting financial vulnerabilities are placing […]

The International Monetary Fund (IMF) on Sunday urged G20 leaders to accelerate efforts to deliver quicker and more predictable debt restructurings.

Managing Director Kristalina Georgieva spoke at the G20 Leaders’ Summit in Johannesburg, South Africa — the first ever held on African soil – warned that sluggish global growth and mounting financial vulnerabilities are placing intense pressure on the world’s poorest economies.

Georgieva said the global economy has shown “resilience” to multiple shocks, including trade tensions and persistent uncertainty, but remains “worse than we need” due to weak growth and exceptionally high debt.

“Good progress has been made under the Common Framework,” she said, adding, “But more effort is needed to deliver faster and more predictable debt restructurings, and we must all step forward when we can.”

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She praised South Africa’s G20 presidency for advancing an October Declaration on Debt, calling it “a clear road map for the future.”

Georgieva said resilience emerged as the unifying theme of the Johannesburg summit, taking place amid “sweeping policy shifts and deep transformations.”

She noted that countries must strengthen institutions, restore policy buffers, and pursue structural reforms to unlock private-sector growth.

“The global economy is doing better than we feared, but worse than we need,” she said. While the private sector and stronger policy frameworks have supported stability, she warned that geopolitical tensions, climate shocks, and technological disruption are elevating risks worldwide.

To help countries navigate rising vulnerabilities, Georgieva confirmed that the IMF is increasing its permanent quota resources by 50 percent — a move she said enhances the Fund’s ability to provide timely financing.

The IMF is currently supporting members through 50 programs, including 21 in sub-Saharan Africa.

She stressed the need for both domestic reforms and strengthened international cooperation, including updated trade rules suited to the digital economy and expanded financing for countries in need.

 

AI: A Source of Growth and Upheaval

The IMF chief also spoke on artificial intelligence, which she described as a potential driver of nearly 1 percent additional global economic growth — but also a disruptive force hitting labor markets “like a tsunami.”

The IMF, she added, has developed a four-pillar index to assess countries’ readiness for AI, covering digital infrastructure, skills and labor-market flexibility, technological diffusion, and ethical and regulatory frameworks. Many developing countries, she warned, lag across multiple dimensions.

“Not all countries are ready,” Georgieva said, noting that up to 60 percent of jobs in advanced economies and 40 percent in emerging markets could be affected by AI.

She called for rapid domestic investments in skills and infrastructure, international cooperation on AI ethics — led by the United Nations — and stronger support to help developing economies avoid falling further behind.

Georgieva emphasized that resilience must be built at home but reinforced through global cooperation. She thanked President Cyril Ramaphosa and South African officials for steering the summit’s discussions and for their role in advancing work on debt, development, and global economic stability.

 

Nigeria’s debt-to-GDP to decline to 33.8% by 2030

Meanwhile, the IMF in its October 2025 Fiscal Monitor report projected that Nigeria’s general government gross debt as a percentage of GDP would drop steadily over the next five years, reaching 33.8% by 2030.

The Fiscal Monitor titled, “Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth” “explores how enhancing spending efficiency and strategically reallocating resources— particularly toward infrastructure, human capital, and research and development—can improve growth prospects, without increasing overall spending.”

“By implementing these expenditure reforms, governments can not only strengthen economic resilience but also pave the way for a more prosperous future for their citizens,” IMF said.

However, experts say this “positive outlook is inconsistent with recent trends in Nigeria’s total public debt, which continues to trend upwards in absolute terms.”

Recent data from the Debt Management Office (DMO) show that total public debt reached a record N152.40 trillion as of June 30, 2025, up from N149.39 trillion at the end of March 2025—an increase of N3.01 trillion, or 2.01 percent, in just three months.

Currently, Nigeria’s debt to GDP stands at 39.4% after the rebasing of the GDP in July this year.

Analysts at the Nigeria’s Economic Update said, “The rising debt stock reflects both additional borrowings and the impact of exchange rate fluctuations on external obligations.

“To mitigate this effect and expand fiscal space, the government should prioritise improved revenue mobilisation from both oil and non-oil sources.

“For the oil sector, it is crucial to combat pipeline vandalism and oil theft by implementing stringent punitive measures against offenders and to attract investments in modern oil infrastructure to replace obsolete ones. Furthermore, maintaining strict fiscal discipline by curbing non-essential recurrent expenditures is also key to ensuring sustainable debt levels and long-term economic stability in Nigeria.”