Millions of people around the world live in countries that are trapped in unjust debt.
In Africa, thirty-four countries spend more on debt repayments than health or education.
Many of the world’s most climate vulnerable states are spending five times more on debt than dealing with the climate emergency – even as these countries face floods and famines.
The debt crisis means that all around the world, from Senegal to Sri Lanka, Ethiopia to El Salvador, there are children who can’t go to school, hospitals that can’t offer people the treatment they need and homes that can’t be rebuilt when climate disaster strikes.
It’s the worst debt crisis for a generation. Greedy private lenders like banks, hedge funds and oil traders have already made billions off the debt crisis. And despite the growing global pressure for a meaningful response, wealthy countries have so far failed to act.
Now the debt vultures are swooping in.
Debt vultures are speculators: rather than lending money directly they scour the horizon looking for countries in crisis whose debt they can buy up at rock bottom prices. Then they threaten legal action, seemingly strong-arming countries into full repayment, and delivering themselves vast profits by draining much needed resources from communities around the world.
Because 90% of these debt contracts with lower-income countries are overseen by UK law, the vultures seem to be using the threat of legal action here to force countries into bad deals. By failing to act, our government is letting them do it.
It’s not the first time debt vultures have used such outrageous tactics. In 2018 it bought up some of Mozambique’s debt, at the height of the hidden debt scandal and when a case had already been brought, showing that the loans were illegal under Mozambique’s law – .
Vulture funds brought cases against the Argentinian government after the country defaulted in the early 2000s, and secured eye-watering windfalls. Elliott Management and Aurelius pursued Argentina in the courts for a decade after refusing to take part in debt relief agreed by other creditors. In 2019, Elliott Management was paid $2.4bn by the Argentinian government for debt they bought for $117 million – that’s a profit of over 2000%. Aurelius’ case continues to this day.
We’ve beaten the debt vultures before.
In 2010, we won a landmark law that stopped vulture funds from being able to sue countries through the UK courts. This victory meant more money for health, education and public services in countries like Liberia and the Democratic Republic of Congo. That law applied to the existing debts of countries in crisis at the time – but more debt has accumulated since then and the debt vultures are back.
Indebted countries around the world know they could end up facing legal action in the UK if they don’t agree to the punitive terms demanded by debt vultures. The sight of other countries being sued is proof it could happen to them; right now, two of the poorest countries in the world – Ethiopia and South Sudan – are being sued by their lenders through the high courts in London.
The vulture funds are exploiting this climate of fear, apparently strong-arming countries into devastatingly bad deals and taking legal action when they don’t get their way. They’re scouring the landscape for opportunities to swoop in on countries in debt crisis – which is exactly what they appear to have done in Ukraine and are trying to do in Ethiopia.
Ethiopia applied for debt relief five years ago. Two debt vultures threatened legal action, apparently to push Ethiopia into agreeing a bad deal, which would see the vultures being repaid 28% more than other lenders. China and France blocked this deal. But now, the debt vultures have said they are suing Ethiopia in the UK.
As Catherine Mithia from Afrodad explains:
“The actions of VR Capital and Farallon Capital Management threatening legal action against the Government of Ethiopia continues to prove the ineffectiveness of the processes in place that are supposed to help countries in crisis negotiate debt relief.
“Without decisive action that prevents against litigation and predatory practices by these vulture funds, Ethiopia will continue to pay more of its resources towards servicing rather than essential public services deepening inequality”.
In response to the pandemic, the G20 – a self-selected group dominated by rich countries – introduced a process called the Common Framework which was supposed to help countries in crisis get debt relief. It has failed, and only four countries have ever applied, one of which was Ethiopia.
Ethiopia has been negotiating debt relief deals with governments and private lenders for five years. Government lenders such as China and France agreed a debt relief deal over a year ago, but private lenders have refused similar terms.
Two vulture funds – VR Capital and Farallon Capital Management – led the negotiations with the Ethiopian government on behalf of the private lenders. In October 2024, Ethiopia made a generous offer to private lenders – which they rejected. The debt vultures then threated to sue Ethiopia.
Ethiopia made an even more generous offer in October 2025, which the vultures once again rejected – and again threatened to sue through the UK courts.
In January 2026, the Ethiopian government offered a deal that would have seen private lenders repaid 28% more than Ethiopia’s other lenders – and 50% more than if they had lent to the US government. China and France rightly blocked the deal, on the basis that private lenders weren’t offering enough debt relief.
Now the debt vultures are suing Ethiopia through the UK courts.
Ethiopia is a country that has been hit by a multitude of crises in recent years. Over 3 million people are estimated to have been displaced by internal conflict and an unprecedented drought. Over 21 million people need humanitarian support.
As Abdurahman Hussien, a community leader in Ethiopia explains:
“Public debt accounts for a larger share of Ethiopia’s budget than that of education, health, water and energy combined. Substantial debt relief is required to free-up resources.”
The debt vultures’ outrageous behaviour is draining resources from a country that is deep in economic crisis, where millions of people are being denied access to essential public services.
In Ukraine, which has been at war since the Russian invasion in 2022, debt vultures appear to have pressured the government into a deal that will see them paid $3.7 billion on debt with an original value of $2.6 billion. This is twice as much as other lenders received.
In December 2025, debt vultures seemingly pressured the Ukrainian government into a deal that will deliver them over $2bn more than other lenders. A debt justice law in the UK could have stopped this from happening.
During the negotiations, two vulture funds – VR Capital and Aurelius Capital Management – led a group of private lenders in demanding large payments from the Ukrainian government from one part of its debts. These debts originally allowed for large increases in payments if the economy grew – but no fall in payments if economic growth fell.
Having collapsed in 2022 after the Russian invasion, the Ukrainian economy began growing again in 2023 because of international aid and military assistance. As a result, the debt payments due skyrocketed.
The Ukrainian government was able to agree new terms on their debt agreements with most of their lenders. But the vulture funds refused, instead demanding almost three times more than the other lenders.
As a result of the devastating impact of the Russian invasion, Ukraine defaulted on these particular debts in June 2025.
Ukraine was keen to reach a deal with the debt vultures and apparently feared being sued through the UK courts once the war was over.
In December 2025, the Ukrainian government agreed to pay the vultures $3.7 billion on a debt with an original value of $2.6 billion.
The vultures have been paid more than twice as much as the other lenders received. During the negotiations, VR Capital and Aurelius Capital Management also managed to negotiate terms with the government that will double the amount owed by Ukraine if it defaults again – considered likely, given the precarious situation in the country.
The vultures are cashing in and getting rich by draining national budgets, taking away resources from schools, hospitals, and essential public services.
The debt vultures are circling. It’s time to stop them swooping in on countries in debt crisis. Sign the petition today and help stop the debt vultures mid-flight >>>
FAQs
Just like shares, or commodities like copper or coffee, debts can be bought and sold on the financial markets. When a country takes on a debt, e.g. for £1 million, it signs a contract saying it will repay £1 million plus a certain amount of interest by a certain date. Before that date, the original lender can sell on the right to be paid the £1 million plus interest when the debt comes due.
When a country looks like it can’t or won’t pay its debts, the ‘market price’ of the debt can fall very low. This is where a type of hedge fund known as vulture funds or debt vultures – come in: they buy up these ‘distressed debts’ at rock bottom prices, then threaten to sue for large repayments in order to make vast profits.
When government lenders agree to debt relief, vulture funds often refuse to agree to a fair reduction in their debts. Instead, they demand unfair profits by threatening to take the country to court to demand the original value of the debt in full, often with huge interest and penalties added on top.
Debt vultures, otherwise known as vulture funds, are a type of private creditor. They are hedge funds that buy ‘distressed’ debt cheaply. That means debt from countries that are likely to default (i.e. stop making debt repayments) or are already in default. Then they try to collect the original amount of the debt, to land themselves huge profits, by taking a hardline stance in debt relief negotiations and threatening legal action against countries that don’t agree to their demands.
Debt vultures are different to other private creditors such as BlackRock, JP Morgan and Goldman Sachs, who have already made billions out of the debt crisis. Private lenders such as these account for a large proportion of lower-income countries’ external debt, but in some cases, such as Ethiopia and Ukraine, we are now seeing debt vultures leading debt relief negotiations on behalf of private creditors.
90% of the debts owed to financial giants by lower-income countries are overseen by UK law. This means parliament could pass a debt justice law that would force private lenders – including debt vultures – to take part in debt cancellation.
This law could:
- Make sure that no private lender could sue a country for more than they would have got if they had taken part in debt restructuring through existing agreements
- Prevent private lenders from suing while debt relief negotiations are taking place.
The other place which governs debt contracts is New York. The New York Assembly is already considering bills that aim to achieve the same outcomes as a debt justice law in the UK.
We are working closely with campaigners in New York to push for reforms that would win justice for all countries in debt crisis, and working with allies globally in calling for a new global agreement on debt cancellation, that would end the cycle of debt crises, overseen by the United Nations.
In 2010, Debt Justice and our allies won a landmark law that stopped vulture funds from being able to sue countries through the UK courts. This vulture fund law made private lenders take part in the debt cancellation scheme won by the Jubilee 2000 campaign, called the Heavily Indebted Poor Countries initiative.
The vulture funds law applied to the existing debts of 40 lower-income countries in crisis. In 2013, Debt Justice won an extension to this law, so that it also applied to UK Crown Dependencies.
This victory meant more money for health, education and public services in countries like Liberia and the Democratic Republic of Congo. It led to over $100 billion worth of debt cancellation, and made a huge, material difference to the lives of millions of people – but as it only applied to the existing debts of countries in crisis at the time, it cannot be used to win debt relief for countries which aren’t covered by the scheme. Neither does it apply to debts which have been taken on since the law was established.
None of the 54 countries that are in debt crisis today can win debt cancellation under this previous law. Now it has come to an end, the debt vultures are back.
During the Covid-19 pandemic, the G20 – a self-selected group dominated by rich nations – introduced a process called the Common Framework which was supposed to help countries in crisis to get debt cancelled. It has failed. Only four countries have ever applied (Chad, Ethiopia, Ghana and Zambia) and none have received adequate debt relief.
In 2027, the UK will host the G20 presidency, with meetings happening here in the UK – and right now the government is deciding what will be on the agenda. This is a big opportunity for us to show the government that a new debt justice law would not only make a significant impact on the 54 countries in debt crisis right now – it would also add weight to lower-income countries’ calls for changes to the Common Framework to make it actually deliver debt relief.
If the UK were to take action to reign in the debt vultures and other private lenders, it would send a strong signal to other G20 members that they should act too. It’s a critical moment for the government to prioritise action on the debt crisis.