The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has urged developing countries to adopt measures to mitigate global shock.
Edun said this at the G24 news conference held on the sidelines of the ongoing International Monitary Fund (IMF) meting in Washington DC.C on Tuesday.
The minister said that premature or excessive interest rate hikes could undermine ongoing economic transformations, delayed responses risk fueling inflation.
To this end, the minister said that central banks of developing countries played critical roles to steer economies through energy crises and tensions.
Edun said that strategic measures to be adopted differs across oil-producing nations, adding that Nigeria benefits from higher revenues, but oil importers face rising costs, though both experience inflationary pressures from energy markets.
According to him, oil exporters are not insulated as increased gas, fertilizer and food prices are being experienced across economies, highlighting the widespread impact of the current global energy crisis.
Edun said that there was the need for resilience, urging countries to utilise built-up buffers and adopt targeted temporary relief measures for vulnerable populations rather than reversing key economic reforms already implemented.
He cautioned against returning to subsidies, stating that reforms such as fuel subsidy removal and foreign exchange liberalisation had strengthened Nigeria’s economic framework in spite recent external shocks.
The minister said that countries should prioritise support to their poorest citizens, ensuring they cope with rising living costs without undermining long-term structural reforms critical to sustainable economic growth.
Edun said that positive oil price shocks could boost fiscal and external accounts for exporters, creating space for responsible public investment while urging adherence to sustainable macroeconomic management practices.
He said that for example, countries adopting hedging strategies to stabilise oil revenues such as measures enhanced predictability and strengthen long-term fiscal planning amid volatile global markets conditions.
Edun said expectations remained that developed nations assist poorer countries, but declining overseas development assistance and rising debt servicing burdens facie developing economies today.
He said that debt servicing costs for developing countries had surpassed inflows from aid and investment, limiting fiscal space and constraining their ability to pursue meaningful economic transformation efforts.
The minister called on multilateral institutions to provide increased liquidity support and policy guidance to help developing nations navigate current challenges and manage heightened financial vulnerabilities effectively.
Edun said that domestic resource mobilisation was a sustainable pathway, urging improved tax systems and greater private sector participation to drive revenue growth and reduce reliance on external financing sources.
He also advocated concessional financing and innovative risk management tools to reduce borrowing costs, high debt servicing obligations hinder development and economic transformation across many developing countries.
Edun said that the growing influence of Artificial Intelligence (AI), may initially widen inequality, it also played a role in enhancing revenue mobilisation through automation and digitiisation systems.
The minister said that improving tax-to Gross Domestic Product (GDP) ratios would depend significantly on technology adoption, including AI to strengthen efficiency, transparency and overall government revenue generation capabilities across economies.
Edun expressed concern over declining global trade growth, adding that fragmentation and supply chain disruptions had shifted focus towards domestic production and regional integration among developing economies.
The Director, G-24 Secretariat, Dr Iyabo Masha, said supply-side constraints, particularly in oil production, respond weakly to monetary policy, urging central banks to adopt a cautious, data-driven approach decisions.
She said that multilateral institutions must intensify support, particularly in reducing borrowing costs and addressing debt challenges.
Masha also reaffirmed the importance of a rules-based global trading system for inclusive growth.
