The World Bank Group says debt in Emerging and Developing Economies (EMDEs) rose to a record high of 55 trillion dollars in 2018.
The bank made this known in a statement released in Abuja on Thursday.
It explained that the development marked an eight-year surge that had been the largest, fastest, and most broad-based in nearly five decades.
According to the World bank, a new group study had advised policymakers to act promptly, to strengthen their economic policies and make them less vulnerable to financial shocks.
“The analysis is contained in Global Waves of Debt, a comprehensive study of the four major episodes of debt accumulation that have occurred in more than 100 countries since 1970.
“It found that the debt-to-GDP ratio of developing countries had climbed from 54 per cent points to 168 per cent since the debt buildup began in 2010.
“On average, that ratio has risen by about seven per cent points a year, nearly three times as fast as it did during the Latin America debt crisis of the 1970s.
“The increase, moreover, has been exceptionally broad-based, involving government as well as private debt and observable in virtually all regions across the world.”
The statement quoted the World bank group’s President, Mr David Malpass as saying that “the size, speed, and breadth of the latest debt wave should concern us all.”
“It underscores why debt management and transparency need to be top priorities for policymakers, to increase growth and investment and ensure that the debt they take on contributes to better development outcomes for the people.”
The bank noted that the prevalence of historically low global interest rates mitigated the risk of a crisis for now, but the record of the past 50 years highlighted the dangers.
It added that since 1970, about half of the 521 national episodes of rapid debt growth in developing countries had been accompanied by financial crises that significantly weakened per capita income and investment.