MONEY TRAP:
A UNESCO report showed that children lost out to servicing foreign debt in 113 countries, with 18 spending five times more on loans than education
Most developing countries spent less on education than they did repaying debt last year, a UN agency said, at the same time as global aid to education is predicted to decline by up to 30 percent.
More was spent on servicing foreign debt than on education in 113 developing countries last year, research by the UN’s culture and education agency UNESCO said. In sub-Saharan Africa, countries spent 3.6 times more on debt than education.
The situation is likely to be exacerbated by funding cuts, the agency said.
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Low and lower-middle-income countries have already lost 21 percent of the aid to education they were receiving in 2023 and could lose up to 30 percent by next year, it said. Some countries — including Afghanistan, Mali, Niger and Liberia — have already lost more than 40 percent in three years.
“Current approaches really keep the countries trapped in a cycle of austerity, underinvestment and stalled development,” UNESCO Division for Education 2030 director Min Jeong Kim said.
“This is really weakening countries’ stances on economic growth, eroding domestic revenue mobilization and ultimately also diminishing their ability to handle their debt over time,” she said.
Eighteen of the most indebted countries spent five times the amount they did on education on debt — and up to 16 times more in the case of Sri Lanka.
According to the UK-based campaign group Debt Justice, repayments by poorer countries hit a 35-year high last year, with 56 countries spending almost one-fifth of their total revenue on servicing loans.
“Countries’ debt payments have ballooned following a series of shocks from COVID, energy price and interest rate rises and climate disasters,” Debt Justice policy director Tim Jones said. “In the worst-affected [countries], this is leading to cuts in spending on essential services such as health and education.”
The situation has been made worse by aid cuts made by the US and Europe, which saw funding to education drop by US$600 million in 2024, the last recorded figures, and is expected to have fallen further last year.
The combined impact of aid cuts and public spending being redirected to debt servicing has meant disruptions to education systems, with schools often not receiving sufficient funds to operate and teachers not being paid.
In the long term, there is concern that weakened education systems affect indebted countries’ ability to develop their economies and better equip themselves to handle debt burdens in the future.
UNESCO said there needed to be a change to how debt relief was structured, shifting away from short-term relief to long-term arrangements that allowed countries to continue funding public services.
Jones said that another key factor in changing debt relief was ensuring that private lenders, often based in Britain and the US, were not able to block agreements to extract more profit for themselves, as they recently did with Ethiopia.
“The UK needs to use its presidency of the G20 in 2027 to get major changes to the debt-relief process, including more debt cancelation and a faster process,” he said. “Central to this is incorporating the process into English law, so that private creditors can no longer disrupt and hold out from the debt relief.”