Baku: Many developing countries borrow at higher interest rates due to unfair financial assessments, UN Special Envoy on Financing the 2030 Agenda for Sustainable Development Mahmoud Mohieldin said at the session titled '8th SDG Dialogue: Innovative Financing for Sustainable Development - Beyond Aid and Traditional Official Development Assistance (ODA)' held within the framework of the Islamic Development Bank Annual Meetings in Baku, APA-Economics reports.

According to Azeri-Press news agency, the UN Special Envoy highlighted that the debt problem remains one of the major challenges for these nations. Despite the actual default risk of African countries being less than 3.5%, they are compelled to pay interest rates of 13-14% or even higher. Mohieldin pointed out that this reflects a mispricing of risk within the financial system, which is a significant contributor to the accumulation of debt.

He further explained that in the realm of infrastructure financing, external financing continues to dominate, while the private sector's involvement is limited to only 11%. Mohieldin stressed the need for a shift in this dynamic to alleviate the financial burden on developing countries and promote sustainable development.