A decade after the adoption of the Sustainable Development Goals (SDGs), development is facing serious headwinds – including what UN officials describe as a “silent crisis” of surging debt service payments in low-income countries.
On Friday, Deputy Secretary-General Amina Mohammed launched a new report, Confronting the Debt Crisis: 11 Actions to Unlock Sustainable Financing.
She was joined by experts Mahmoud Mohieldin and Paolo Gentiloni, along with Rebeca Grynspan, Head of the UN Conference on Trade and Development (UNCTAD).
A growing crisis
“Borrowing is critical for development,” Ms. Mohammed said, but today, “borrowing is not working for many developing countries, over two-thirds of our low income countries are either in debt distress or at a high risk of it.”
The crisis is accelerating, Ms. Grynspan warned.
More than 3.4 billion people now live in countries that spend more on interest payments than on health or education – 100 million more than last year.
Debt service payments by developing countries have soared by $74 billion in a single year, from $847 billion to $921 billion.
“The nature of this crisis is mostly connected to the increase of debt servicing costs,” Mr. Gentiloni explained. “Practically, the debt services costs doubled in the last ten years.”
Prepared by the UN Secretary-General’s Expert Group on Debt, the report reinforces the commitments put forward in the Compromiso de Sevilla, the outcome document of the Fourth International Conference on Financing for Development – taking place next week.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
A path forward
The report outlines 11 actions that are both technically feasible and politically viable.
Mr. Mohieldin explained that the recommendations fall under two key goals: providing meaningful debt relief and preventing future crises.
It identifies three levels of action:
At the multilateral level: repurpose and replenish funds to inject liquidity into the system, with targeted support for low-income countries.
At the international level: establish a platform for borrowers and creditors to engage directly.
At the national level: strengthen institutional capacity, improve policy coordination, manage interest rates, and bolster risk management.
“These are eleven proposals that are doable and that only need the political will of all the actors to be able to make them real,” Ms. Grynspan stressed.