Edun Warns Against Policy Missteps, Urges Developing Nations to Build Resilience Amid Global Shocks

By Onwe Wisdom, Pan Afric Reporters

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Eden has called on developing countries to adopt proactive and balanced policy measures to cushion the impact of global economic shocks, warning that missteps could undermine ongoing reforms and worsen inflationary pressures.

The position according to a press statement issued by the ministry’s Head of Information and Public Relations Unit, Federal Ministry of Finance, Efe Ovuakporie was stated at the G24 news conference at the sidelines of the International Monetary Fund meetings in Washington, D.C. where the minister cautioned against both premature and delayed monetary policy actions.

“Premature or excessive interest rate hikes could undermine ongoing economic reforms, while delayed policy responses risk fuelling inflation,” he said.

He emphasised the critical role of central banks in developing economies in managing complex challenges, including energy crises and geopolitical tensions, noting that responses must be tailored to each country’s economic structure.

According to Edun, while oil-producing countries like Nigeria may benefit from rising oil prices, oil-importing nations face increased costs, with both groups still contending with inflation driven by global energy market volatility.

“Even oil-exporting countries are not immune, as rising costs of gas, fertiliser, and food continue to affect economies across the board,” he noted.

The minister stressed the importance of building economic resilience through the use of fiscal buffers and targeted, temporary relief measures for vulnerable populations, rather than reversing key reforms.

He warned against a return to subsidy regimes, stating that policies such as fuel subsidy removal and foreign exchange liberalisation have strengthened Nigeria’s economic framework.

“Governments must prioritise support for the most vulnerable without jeopardising long-term structural reforms essential for sustainable growth,” Edun said.

He further highlighted the need for disciplined macroeconomic management, even in the face of positive oil price shocks, noting that such gains should be channelled into responsible public investment.

Edun also pointed to innovative strategies such as hedging to stabilise oil revenues and improve fiscal predictability amid volatile global markets.

On global financing challenges, the minister lamented declining overseas development assistance and rising debt servicing costs, which he said now exceed inflows from aid and investment in many developing countries.

“This significantly limits fiscal space and constrains efforts toward meaningful economic transformation,” he stated.

He called on multilateral institutions to increase liquidity support and provide policy guidance, while urging developing nations to strengthen domestic resource mobilisation through improved tax systems and enhanced private sector participation.

Edun also advocated concessional financing and innovative risk management tools to reduce borrowing costs, stressing that high debt burdens remain a major obstacle to development.

On technology, he acknowledged the dual impact of Artificial Intelligence, noting that while it may initially widen inequality, it also offers opportunities to boost revenue generation through automation and digitalisation.

“Improving tax-to-GDP ratios will depend significantly on technology adoption to enhance efficiency, transparency, and revenue mobilisation,” he said.

The minister expressed concern over slowing global trade growth, attributing it to fragmentation and supply chain disruptions, and urged developing countries to prioritise domestic production and regional integration.

Also speaking at the event, Director of the G-24 Secretariat, Iyabo Masha, urged central banks to adopt cautious, data-driven approaches, noting that supply-side constraints—particularly in oil production—respond weakly to monetary policy.

She further called on multilateral institutions to intensify support in reducing borrowing costs and addressing debt challenges, while reaffirming the importance of a rules-based global trading system for inclusive growth.