As the world grapples with slowing economic growth and mounting global challenges, developing countries are increasingly buckling under the weight of unsustainable debt.
A new report from the United Nations Conference on Trade and Development (UNCTAD) reveals that global public debt surged to an all-time high of $102 trillion in 2024, up from $97 trillion the previous year.
Most alarming is the uneven burden: 3.4 billion people now live in countries where more money is spent servicing debt than on health or education. Released ahead of the Fourth International Conference on Financing for Development (FFD4), the “World of Debt 2025” report highlights a stark reality—while debt can serve as a tool for development, for many low- and middle-income countries, it has become a trap.
Developing nations, which account for just 39 per cent of global GDP but are home to 83 per cent of the world’s population, now owe $31 trillion—double their debt load in 2010.
“The sharpest edge of this crisis is cutting deepest into the developing world,” said UN Under-Secretary-General for Economic and Social Affairs, LI Junhua, during the opening of the FFD4 conference.
“Global financing needs reform like never before.” Junhua emphasized that developing countries must not be forced to choose between paying interest and investing in people. He called for a reimagined global financial system that prioritizes inclusivity and resilience, echoing calls for a new global deal to end the debt trap and make trade and finance work for inclusive growth.
Nigel Clarke, deputy managing director of the International Monetary Fund (IMF), acknowledged the pressure facing many countries. Speaking at the same event, he warned that while the risk of a full-blown systemic debt crisis may be contained for now, high interest rates and persistent refinancing needs are severely constraining nations’ ability to fund development and build resilience.
“This is why we continue to advocate for debt relief and tailored policy support,” Clarke said. “We want to help countries build vibrant, more resilient economies.”
In Uganda, the crisis is no longer abstract. The country plans to allocate 15.7 per cent of its revenue to interest repayments alone in the upcoming 2025/2026 financial year.
According to Julius Mukunda, coordinator of the Civil Society Budget Advocacy Group (CSBAG), Uganda has borrowed $11.86 billion over the past 11 years, of which only a fraction—about $608 million—was earmarked for critical sectors like agro- industrialization.
“Some loans remain unused, but taxpayers still shoulder the burden of interest,” he warned.
It is all about hot air for the poor of this world to sponsor the rich so that the poor can get rich as well. It is hypocrisy indeed on the part of the American IMF and World Bank to continue to insist that their efforts to initiate the programme of HIPC is working well when American debt itself is raising up into the skys for many years now and counting! Uganda was given debt relief some time back. What followed next is anyone’s nightmare! Now that President Museveni no longer trusts decisions of a democratic mandate, he is promising his expensive personal army heaven on earth not to remove him from state power. But then he spends over 20 trillion Uganda shillings to pay debts and another big amount to put up dodgy national elections now 40 years and counting. How does such items in the national budget initiate development in this nation if Uganda especially if this nation receives another debt relief?