KEY POINTS

• Finance Minister Edun warned against generalized subsidy reversals at the IMF Spring Meetings, urging targeted support for the poorest instead
• Edun revealed that developing countries’ debt servicing outflows now exceed incoming external support, citing the global debt burden on transformation efforts
• Edun called on multilateral institutions for concessional financing and urged domestic resource mobilization as a long-term solution

Finance Minister Olawale Edun on Tuesday warned against subsidy reversals at the World Bank/IMF Spring Meetings in Washington, urging developing nations to hold reform gains as global shocks intensify pressure to abandon hard-won policy progress.

Speaking as Chair of the G-24 Group of Nations, Edun said central banks face a difficult balancing act on interest rates. “If interest rates are raised too early and too high in an effort to curtail potentially rising inflation, that too can do damage to the transformations which are taking place in economies,” he said. He also stressed that support must target the poorest rather than revive generalized subsidies.

Developing countries’ debt outflows exceed inflows

Meanwhile, Edun delivered a stark assessment of the global debt burden weighing on developing economies, revealing that debt servicing outflows now exceed what those countries receive in external support. “The elevated borrowing costs and the debt servicing burden that developing countries are paying is weighing heavily on their ability to transform their economies,” he said.

Furthermore, G-24 Secretariat Director Iyabo Masha said the gap in borrowing costs persists despite recent institutional reforms. Edun called on multilateral development institutions to step up concessional financing and liquidity tools to help countries navigate the current period.

Domestic reform and global trade fragmentation

Additionally, Edun argued that the global debt burden ultimately requires a domestic solution: comprehensive tax frameworks and resource mobilization strategies that reduce costs for the lowest earners. However, he also pointed to a broader structural shift, noting that a retreat from the rules-based world trading system has pushed developing countries toward regional integration and domestic production.

Still, Edun stressed that stronger nations and multilateral institutions must do more to support vulnerable economies even as global fragmentation accelerates.