The United Nations has issued a stark warning that developing nations are prioritising debt repayment over education, with 113 countries diverting funds away from their schools last year. The alarming trend, which sees low- and lower-middle-income countries allocating increasingly large proportions of their national budgets to servicing foreign debt, is set to worsen as global aid directed towards education declines by up to 30%. In sub-Saharan Africa, the disparity is particularly stark, with countries spending a staggering 3.6 times more on debt repayments than on education.
The report highlights that many countries are being forced to make impossible choices between meeting their debt obligations and investing in essential public services like education. This is particularly evident in Afghanistan, Mali, Niger, and Liberia, where education aid has fallen by over 40% in just three years. The situation is compounded by anticipated funding cuts, which will only exacerbate the difficulties faced by these nations.
According to Min Jeong Kim, director of Unesco’s education division, current financial approaches are trapping developing countries in a cycle of austerity and underinvestment, ultimately hindering economic growth and their long-term ability to manage debt. The report reveals that 18 of the most indebted countries spent five times more on debt than education, while Sri Lanka faced an extreme situation, spending up to 16 times more on debt servicing.
The pressure on these countries is further intensified by a series of global shocks, including the Covid-19 pandemic, rising energy prices, increased interest rates, and climate disasters. This has led to cuts in essential public services like health and education, exacerbating the plight of developing nations. Tim Jones, policy director at Debt Justice, attributes the surge in debt repayments to these global shocks.
The consequences of reduced aid from major donors, such as the US and Europe, combined with the redirection of public spending towards debt servicing, are causing significant disruption to education systems. Schools are struggling with insufficient funds, and teachers are often left unpaid. In the long term, this erosion of education infrastructure is feared to impede these nations' economic development and their future capacity to manage debt burdens effectively.
Unesco is advocating for a fundamental change in how debt relief is structured, moving from short-term solutions to long-term arrangements that enable countries to consistently fund public services. Debt Justice has urged the UK, which is set to hold the G20 presidency in 2027, to champion significant reforms to the debt-relief process, including greater debt cancellation and a faster mechanism. A key proposal involves incorporating the process into English law to prevent private creditors, often based in Britain and the US, from blocking agreements and seeking excessive profits.