In a new report released on 4 June, the United Nations sounded the alarm over the escalating debt burdens to global prosperity.
Titled ”A world of debt 2024: A growing burden to global prosperity”, the report highlights the unprecedented surge in public debt – comprising both domestic and external general government borrowing – which reached a historic peak of $97 trillion in 2023, up by a notable $5.6 trillion from the previous year.
The report, prepared by the Global Crisis Response Group technical team at UN Trade and Development (UNCTAD) under the leadership of Secretary-General Rebeca Grynspan, noted that particularly in Africa, faltering economies in the wake of multiple global crises have resulted in a heavier debt burden.
Said the report: “The number of African countries with debt-to-GDP rations above 60 percent has increased from 6 to 27 between 2013 and 2023.
Meanwhile, repaying debt has become more costly, and this is hitting developing countries disproportionately.
In 2023, developing nations paid $847 billion in net interest, 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. Presently, half of them designate a minimum of 8 percent of government revenues to debt servicing, a number that has doubled in the last ten years.
Moreover, in 2023, a historic 54 developing nations, with almost half in Africa, dedicated a minimum of 10 percent of government funds to debt interest payments.”