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World Bank calls for debt relief as funds vanish from poor countries
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The World Bank’s top economist called on private lenders to shoulder some of the cost of debt forgiveness for the poorest countries, as record high repayments drain budgets that should be focused on health, education and infrastructure.
Interest payments alone by the lowest-income nations ballooned to a record $34.6 billion in 2023, quadrupling over the past decade, the bank said in its latest International Debt Report. Including principal, those 78 nations are paying $96.2 billion annually to service $1.1 trillion in debt.
More alarming, according to Chief Economist Indermit Gill, is that private lenders have pulled almost $13 billion more in service payments from those countries than they injected in new financing over the last two years. That burden is diverting funds from urgently needed investments at home, in areas from public health to climate change.
The World Bank’s latest warning caps a period of growing strain on the finances of poor countries, after a pandemic that forced higher spending and then a worldwide surge in interest rates that raised debt costs. Countries including Sri Lanka and Zambia have defaulted since Covid hit, while others like Pakistan and Kenya teetered on the brink — and international efforts to agree on a wider fix, including relief from private loans too, kept hitting snags.
“It’s time to face the reality: the poorest countries facing debt distress need debt relief if they are to have a shot at lasting prosperity,” Gill wrote in the forward to the report released Tuesday. “Private creditors that make risky, high-interest loans to poor countries ought to bear a fair share of the cost when the bet goes bad.”
For all developing countries, including massive and stable economies such as China and India, total debt payments hit $1.4 trillion last year — including interest of $406 billion — on $8.8 trillion in debt. Over the past two years, that broader group has paid private investors $141 billion more than they’ve seen in new loans, according to the World Bank report.
“That reflects a broken financing system,” Gill wrote, adding that the idea hatched a decade ago that private capital could flood into poor countries to turbocharge development “proved to be a fantasy.”
Gill’s verdict comes as the bank’s president, Ajay Banga, has made one of his top priorities incentivizing more private capital to invest in development alongside multilateral lenders.
The bank is also working with its sister institution, the International Monetary Fund, to steer countries in debt distress toward policies that bolster their finances and lower borrowing costs.
Many nations accumulated debt piles by borrowing heavily in the pre-Covid years when interest rates were low — especially from China and private lenders, which have grown to be significant creditors to poor countries. Problems escalated when the pandemic pushed governments into emergency spending, and then interest rates rose to fight post-Covid inflation.
The consequences are still playing out. A report by credit rating firm S&P Global in October predicted that “sovereigns will default more frequently on foreign currency debt over the next 10 years than they did in the past.”
The flight of private capital from emerging markets has continued this year. Investors using hard currencies such as dollars or euros have pulled roughly $13.6 billion from emerging-market debt funds in 2024, after withdrawing almost $23 billion the previous year, according to data from Bank of America.
The biggest risks are concentrated among the 78 poorest countries categorized by the World Bank as eligible to receive low- or no-interest financing and grants from its International Development Association fund.
Many of those countries face “a metastasizing solvency crisis that continues to be misdiagnosed as a liquidity problem,” Gill wrote.
Operatives of the Economic and Financial Crimes Commission (EFCC) have nabbed Mustapha Abdullahi, the director-general of the Energy Commission of Nigeria, over alleged money laundering offences involving more than N500 billion.
TheCable understands that Abdullahi was arrested in Abuja on Wednesday and is currently being held in the custody of the anti-graft agency for further investigation.
Cable
. We’ll continue to work with local and international partners until illicit drug supply chain is fully broken in Nigeria, Marwa assures
Operatives of the National Drug Law Enforcement Agency (NDLEA) have intercepted a large consignment of Canadian Loud, a high-potency strain of cannabis, weighing 4,173.5 kilograms with a street value of Ten Billion Four Hundred and Thirty-Three Million Seven Hundred and Fifty Thousand Naira (N10, 433, 750,000.00) only at the Tincan Island Port in Lagos.
The successful interdiction of the illicit drug consignment followed painstaking intelligence gathering, sustained surveillance, and trailing of the container, which was transloaded a number of times since it left Toronto, Canada on 28th March, conveyed through rails to Montreal, where it was loaded on board a vessel, Jakarta express voyage, which arrived Tanger Med Port in Morocco on 15th April, discharged and reloaded on another vessel, Osaka voyage, which eventually arrived the Lagos Port on Saturday 9th May 2026.
The over two months of monitoring the shipment by the Marine Intelligence Unit of NDLEA and the Tincan Island Strategic Command of the Agency, working in close collaboration with international partners particularly the United Kingdom Home Office International Operations, the United States Drug Enforcement Administration, and the Royal Canadian Mounted Police, culminated in the eventual seizure of the consignment on Tuesday 12th May during a joint examination of the container by NDLEA operatives, men of Customs Service and other security agencies.
The development comes barely four days after NDLEA operatives raided a Lekki mansion used as stash house where 4,000 parcels of same psychoactive substance weighing 2,326 kilograms worth over Five Billion Eight Hundred and Fifteen Million Naira (N5,815,000,000.00) were recovered.
The illicit drug consignments from Canada were professionally packed and concealed inside two vehicles: a used Ford Bus and a Mercedes Benz C300 car, stashed within the shipping container. Speaking during the handover of the exhibits by the NCS at the Port in Lagos on Wednesday 13th May, the NDLEA’s Director of Seaports Operations, ACG Ibinabo ArchieAbia said the “achievement once again demonstrates the effectiveness of inter-agency cooperation, international collaboration, and intelligence-driven operations in combating transnational organized crime and illicit drug trafficking.”
Reacting to the development, the Chairman/Chief Executive Officer of NDLEA, Brig. Gen. Mohamed Buba Marwa (Rtd), commended the officers of the Tincan Command and the MIU of the Agency for their vigilance and professional conduct, noting that the volume of recent Loud seizures highlights a coordinated attempt by international drug syndicates to flood the Nigerian market with synthetic strains of cannabis.
“This second massive seizure in less than a week is a clear message to the international syndicates who think they can use our ports as entry points for their soul-destroying trade, that the synergy between NDLEA and Customs Service as well as other security agencies and our international partners like the Canadian Royal Mounted Police, the UK-HOIO and the US DEA is yielding fantastic results. We will not rest until every link in this supply chain is broken and those behind these shipments are brought to justice”, Marwa stated.
A prominent public affairs analyst, Prof. Okey Ikechukwu, has called for the immediate suspension and possible termination of all processes related to the proposed sale of a 40 per cent stake in the Amukpe–Escravos Pipeline, warning that proceeding under the current terms would amount to a “giveaway” of a strategic national asset.
Ikechukwu, Executive Director of the Development Specs Academy, made the remarks during an interview on Tuesday on Arise News, where he questioned the pricing, procedure, and transparency surrounding the transaction.
According to him, Nigeria is not in such financial distress as to justify disposing of a critical infrastructure asset at what he described as a “giveaway price.”
“If that is allowed to happen, it means there is no governance,” he said. “It means that people can exercise arbitrary discretion. It means that processes can be routinely violated.”
His intervention comes amid mounting controversy over the valuation of the pipeline asset. Independent assessments conducted in 2025 reportedly valued the 40 per cent stake at between $544 million and $641 million, more than double the $243 million offer associated with a transaction that collapsed in October 2024.
Ikechukwu argued that any attempt to revive or proceed with the sale on the basis of disputed or outdated valuation benchmarks would undermine due process and public confidence.
“We are not under any desperate need to sell it at a giveaway price, and that’s what appears to be happening here,” he said. “If that is allowed to happen, then it means there is no governance.”
Describing the pipeline as a “performing national asset,” the analyst noted that the facility reportedly maintains operational uptime levels of as high as 95 per cent.
“If you must sell a performing national asset, it must be sold at the right value,” he stated.
To illustrate his concerns, Ikechukwu compared the situation to a failed private land transaction later revived at an outdated price, arguing that such a practice would be unacceptable in any credible commercial environment.
He further warned that proceeding without an updated valuation process could damage investor confidence and weaken perceptions of regulatory integrity.
“But beyond all of that, where will investor confidence be?” he asked. “If you are a lender, how do you feel in this kind of environment? It might even be interpreted as sabotage.”
Beyond the question of pricing, Ikechukwu said the larger issue at stake was institutional credibility and adherence to due process.
“If that is allowed to happen, it means there is no governance,” he reiterated. “It means that people can exercise arbitrary discretion. It means that processes can be routinely violated.”
The development expert consequently called for an immediate halt to all ongoing steps connected to the proposed transaction.
“All processes leading up to the presumed attempt to sell it now should be stopped,” he said. “Quite frankly, terminated. An independent evaluation should take place so that we know the current value of what is on the table and ensure that the country does not lose money in the process.”
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