Developing countries must brace for global economic shocks — Edun

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has urged developing countries to put in place stronger safeguards to cushion the growing impact of global economic disruptions.

Edun made the call during the G24 news conference held on the sidelines of the International Monetary Fund (IMF) meetings in Washington, D.C.

He cautioned that aggressive or poorly timed interest rate hikes could derail ongoing reforms, while delayed interventions could worsen inflationary pressures, stressing the need for prudent monetary responses in emerging economies.

According to him, the effects of global volatility are uneven but widespread, with both oil-producing and oil-importing countries grappling with inflation linked to fluctuations in energy markets.

Edun noted that even oil-exporting nations are facing rising costs of essential commodities such as food, gas and fertiliser, highlighting the deepening impact of the global energy crisis.

He recommended that governments build fiscal buffers and adopt targeted, short-term interventions to protect vulnerable populations, rather than reversing structural reforms like subsidy removal and exchange rate adjustments.

The minister also raised concern over increasing debt servicing burdens in many developing economies, saying they are now consuming more resources than aid and external investment inflows, thereby constraining development spending.

He further called for enhanced multilateral cooperation, concessional financing and stronger domestic revenue systems, adding that emerging technologies such as Artificial Intelligence could improve tax efficiency and public financial management.