UN trade and development reports that developing countries are sinking deeper into a debt-driven development crisis. 

In the report, the organization said that the developing nations’ external debt – money owed to foreign creditors – has quadrupled in two decades to a record $11.4 trillion in 2023, equivalent to 99% of their export earnings.

It said:” A mix of factors has fuelled this surge, including increased borrowing for development projects, volatile commodity prices, and widening public deficits.

The COVID-19 pandemic worsened the situation, as countries borrowed heavily to offset the economic fallout and fund public health measures.

While debt can be a vital tool for economic growth and development, it becomes a problem when repayment costs outpace a country’s capacity to pay. 

That is now the case for two-thirds of developing countries.

Debt distress now looms over more than half of the 68 low-income countries eligible for the International Monetary Fund’s Poverty Reduction and Growth Trust – more than double the number in 2015.

High interest rates are worsening the burden. In 2023, developing nations paid $847 billion in net interest, a 26% increase from 2021.

They borrowed internationally at rates two to four times higher than the United States and six to 12 times higher than Germany. Defaulting on development:

The real cost of debt

When governments must prioritize debt repayments over public services and investments, people pay the price. Schools are underfunded, hospitals lack supplies, and infrastructure crumbles.

Yet, because existing debt workout mechanisms are inefficient and costly, most governments avoid default at all costs – even if it means sacrificing development goals and climate action.

As a result, countries may not default on their debt, but they default on their development.”

▪︎Photo from left: Brazil’s Ambassador to Nigeria, Carlos Garcete, and Nigeria’s Vice President Kashim Shettima.

The Nigerian government has invited Brazil to share its agricultural expertise as part of the $1.1 billion Green Imperative Project (GIP), aimed at boosting food security in Nigeria.

This initiative follows Brazil’s remarkable transformation of its savannah into a leading agricultural hub.

The collaboration was announced by Nigeria’s Minister of Foreign Affairs, Amb. Yusuf Tuggar, during the signing of the commercial phase of the GIP, which seeks to enhance agricultural productivity and foster private sector investment.

Nigeria’s Vice President Kashim Shettima emphasized the project’s importance in addressing the country’s food security challenges and integrating small-scale farmers into diverse agricultural value chains.

He expressed optimism that the GIP will drive economic growth and improve investor confidence, aligning with the broader goals of President Bola Ahmed Tinubu’s administration.

The GIP, which represents the largest agricultural initiative in Africa focusing on sustainable, low-carbon practices, aims to elevate Nigeria’s food production efficiency.

The Memorandum of Understanding for the project was initially signed in 2018, followed by subsequent agreements last year amounting to approximately $8 billion.

Brazil’s Ambassador to Nigeria, Carlos Garcete, highlighted the significance of the GIP, noting that it would facilitate the import of agricultural equipment and allow for local assembly in Nigeria.

This setup is intended to create jobs and ensure that repairs can be handled locally, making the agricultural sector more resilient and sustainable.

A Federal High Court in Abuja has dismissed the objection raised by the Nigerian National Petroleum Company Limited (NNPCL) against the competence of a suit filed by Dangote Petroleum Refinery and Petrochemicals FZE (Dangote Refinery).

Dangote is seeking to void the licences issued by the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to some oil marketing companies to import refined petroleum products.

In its objection, the NNPCL challenged the jurisdiction of the court to hear the suit and urged the court to strike out its name from the suit on the grounds that it was not properly identified by the plaintiff.

It argued that the name, “Nigerian National Petroleum Company Limited,” being its registered name with the Corporate Affairs Commission (CAC), is not the one and the same entity the second defendant sued but the “Nigerian National Petroleum Corporation”.

Ruling yesterday, Justice Inyang Ekwo held that NNPCL’s objection was incompetent as it was filed in violation of Order 29 of the Federal High Court Civil Procedure Rules (FHCCPR), 2019.

Justice Ekwo also held that the NNPCL ought to have filed a defence in the form of a counter-affidavit to the plaintiff’s suit before raising an objection.

The judge averred that under the procedure in lieu of demurrer, any party is entitled to raise, by his pleading, any point of law, and that any point so raised may be disposed of by the trial court at trial or after the trial.

He explained that where a defendant seeks to challenge the jurisdiction of the court, it is the provision of Order 29 of the Federal High Court Civil Procedure Rules (FHCCPR), 2019, that would be applicable.Justice Ekwo added that the NNPCL failed to comply with the provision.

The judge held that the NNPCL, having not complied with the provisions of the FHCCPR 2019 could not be said to have filed a competent preliminary objection.