Global public debt nears $100trn, spurs call for urgent action
Global public debt reached a historic peak of $97 trillion in 2023, up by $5.6 trillion from the previous year, new data released on Wednesday shows.
“The alarming surge in global debt burden calls for urgent reforms to the international financial systems to safeguard a prosperous future for both people and the planet,” the United Nations said.
A new report, titled ‘A world of debt 2024: A growing burden to global prosperity’, highlights the unprecedented surge in public debt – comprising both domestic and external general government borrowing. It was prepared by the Global Crisis Response Group technical team at UN Trade and Development.
“Particularly in Africa, faltering economies in the wake of multiple global crises have resulted in a heavier debt burden. The number of African countries with debt-to-GDP rations above 60% has increased from 6 to 27 between 2013 and 2023,” it said. “Meanwhile, repaying debt has become more costly, and this is hitting developing countries disproportionately.”
It said developing nations paid $847 billion in net interest last year, a 26% increase from 2021. “They borrowed internationally at rates two to four times higher than the U.S. and six to 12 times higher than Germany.”
The rapid rise in interest costs is limiting budgets in developing countries, according to the report.
“Presently, half of them designate a minimum of 8% of government revenues to debt servicing, a number that has doubled in the last ten years,” it said. “Moreover, in 2023, a historic 54 developing nations, with almost half in Africa, dedicated a minimum of 10% of government funds to debt interest payments.”
The report said that with the crisis intensifying, actions to limit global warming to 1.5°C has become urgent.
“Despite this urgency, developing countries are currently allocating a larger proportion of their GDP to interest payments (2.4%), than to climate initiatives (2.1%). Debt is limiting their capacity to tackle climate change,” it added.
It revealed that 3.3 billion individuals reside in nations where interest payments exceed spending on education and health combined.
In Africa, the average person’s spending on interest ($70) surpasses that of education ($60) and health ($39) per capita, according to the report. “A staggering 769 million Africans live in countries where interest payments outweigh investments in education and health, accounting for nearly two-thirds of the entire population.”
