• Says debt service costs stalling development
•Borrowing nations to hold first formal meeting in Thailand next week
Ndubuisi Francis in Abuja
United Nations Conference on Trade and Development (UNCTAD) has disclosed that global public debt rallied to $111 trillion, up from $49 trillion in 2010, raising concerns that rising borrowing costs are adding pressure on developing countries’ public finances, limiting the resources available for health, education, and other development priorities.
In its latest “World of debt” publication, UNCTAD revealed that Since 2022, interest payments on external public debt had exceeded net new lending to developing countries.
According to UNCTAD, developing countries face average public debt interest rates of 5.2 per cent, compared to 2.2 per cent in developed economies, driving interest payments from $363 billion in 2010 to nearly $1 trillion in 2025.
The report said, “Debt should help countries invest in their future. But in many developing countries, the servicing of external debt now exceeds new inflows.”
The UN agency said interest payments in 51 developing countries exceeded government spending on health or education, estimating that developing countries can save about $500 billion a year in interest payments if they are able to borrow at rates similar to those paid by developed economies.
It warned that higher and persistent borrowing costs were constraining public finances across developing economies.
UNCTAD stated that debt servicing in many of such countries now exceeded new external inflows, weakening debt’s role as a tool for future investment.
It said as global public debt reached $111 trillion in 2025, with developed economies accounting for more than two-thirds of that total, debt had been rising faster in developing countries.
UNCTAD called for reversing declines in official development assistance, expanding lending by multilateral and regional development banks, and increasing technical support to strengthen national capacity.
At the country level, it urged stronger macroeconomic management, better public institutions, improved debt portfolio structures, and wider use of innovative financial instruments, ahead of a Borrowers’ Platform meeting set for October 12 in Bangkok, during the IMF-World Bank Annual Meetings.
Meanwhile, the Borrowers’ Platform is gathering momentum ahead of the first Governing Council in Bangkok next week.
The platform is a dedicated space for developing countries to collectively strengthen their voice as rising borrowing costs squeeze development spending.
The Borrowers’ Platform holds its first Governing Council meeting on the side-lines of the IMF/World Bank Annual Meetings in Bangkok, Thailand next week.
“The platform offers borrower countries a dedicated space to work together and share knowledge towards finding a sustainable solution for the debt issues,” said Ambassador Alaa Hegazy of Egypt, Interim Chair of the Borrowers’ Platform.
“It’s a cross-regional space where countries facing the same challenge of increasing debt burden have some place or some forum to discuss these issues,” he added.