Lower-income country debt payments have trebled in the last decade, according to figures calculated by Debt Justice based on IMF and World Bank data.
The calculations show that external government debt payments in 2024 were at the highest level since 1994. High debt payments are set to continue in 2025 and will increase further if the dollar continues to rise in value under a future Trump administration.[1]
The UK government has said that “tackling unsustainable debt” is a key priority.[2]
Tim Jones, Policy Director at Debt Justice, said:
“High debt payments are preventing the public spending needed to cut poverty and tackle the climate emergency. The government needs to turn words into action in 2025 by pushing for an effective debt cancellation scheme and passing a law to ensure private lenders take part in debt relief.”
Earlier this month, World Bank Chief Economist Indermit Gill said:
“It’s time to face the reality: the poorest countries facing debt distress need debt relief if they are to have a shot at lasting prosperity… Sovereign borrowers deserve at least some of the protections that are routinely afforded to debt-strapped businesses and individuals under national bankruptcy laws. Private creditors that make risky, high-interest loans to poor countries ought to bear a fair share of the cost when the bet goes bad.”[3]
The external debt payment data covers 84 low-income and lower-middle income countries, and upper-middle income countries classed as Small Island Development States. Of their total external debt payments across 2020-2025:
- 39% are to private lenders, not including Chinese lenders
- 34% are to multilateral lenders
- 13% are to Chinese public and private lenders
- 14% are to other governments[4]
Governments with external debt payments higher than 20% of government revenue in 2024 and 2025 include Angola, Egypt, Kenya, Pakistan, Senegal and Tunisia.[5] Of bonds of countries governed by the G20’s current debt relief scheme, 90% are governed by English law.[6]
On Christmas Eve, Pope Francis will start the Catholic Jubilee Year, the first since 2000. On 12 December, Pope Francis said debt cancellation should be a major theme of the Jubilee Year:
“In the spirit of this Jubilee Year, I urge the international community to work towards forgiving foreign debt in recognition of the ecological debt existing between the North and the South of this world. This is an appeal for solidarity, but above all for justice.”[7]
Notes
[1] The full statistics are in Debt Justice’s 6-page briefing here.
A spreadsheet with all the data is here.
[2] Labour’s election manifesto said: “Regaining Britain’s global leadership on development is a key part of our plan to reconnect with our allies and partners. Labour will strengthen international development work within the Foreign, Commonwealth & Development Office. We will renew expertise and focus, especially in priority areas such as supporting economic transformation, tackling unsustainable debt, empowering women and girls, supporting conflict prevention, and unlocking climate finance.” https://labour.org.uk/change/britain-reconnected/
This has since been reiterated by Development Minister Anneliese Dodds: https://x.com/AnnelieseDodds/status/1810981504224223470
[3] Foreword to World Bank International Debt Report 2024, pages ix – xi. https://openknowledge.worldbank.org/bitstreams/4246aa14-dffa-415d-a7e8-fa102165a5fa/download
[4] The full statistics are in Debt Justice’s 6-page briefing here.
[5] The full statistics are in Debt Justice’s 6-page briefing here.