Updated By Faith Barbara N Ruhinda at 1223 EAT on Monday 13 October 2025

More than 30 prominent economists, former finance ministers, and a central bank governor have issued a strong call for immediate debt relief for low- and middle-income countries, warning that rising debt repayments are crippling governments’ ability to fund essential public services.

In an open letter released on Sunday ahead of the upcoming World Bank and IMF annual meetings, the group cautioned that many nations are effectively “defaulting on development” — not because they fail to repay loans, but because debt servicing is crowding out critical investments in health, education, and infrastructure.

“Countries around the world are paying exorbitant debt servicing costs instead of funding schools, hospitals, climate action, or other essential services,” the letter states.

Among the notable signatories are Nobel Prize-winning economist Joseph Stiglitz, former Central Bank of Colombia Governor José Antonio Ocampo, and former South African Finance Minister Trevor Manuel.

The economists warn that African governments now spend an average of 17 percent of their revenue on debt servicing. In 32 African countries, external debt repayments exceed healthcare spending, while 25 nations allocate more to debt servicing than to education.

The letter argues that capping debt servicing at 10 percent of state revenue could have life-saving effects—providing clean water to 10 million people across 21 countries and preventing an estimated 23,000 child deaths annually among children under the age of five.

The call for debt relief comes amid growing concerns over the fragility of healthcare systems across Africa, which are showing signs of severe strain.

According to a report published earlier this year by ActionAid, 97 percent of health workers surveyed in six African countries said their wages were insufficient to cover basic living expenses. Additionally, nearly 90 percent reported chronic shortages of medicines and medical equipment, largely attributed to budget cuts and underfunding.

According to Al Jazeera, the International Rescue Committee (IRC) has reported that 10 of the 13 countries most affected by recent U.S. aid cuts are in Africa, further compounding existing economic and humanitarian challenges.

Economists warn that current debt relief efforts are falling short. Under the G20’s Common Framework for Debt Treatment, only 7 percent of the total external debt owed by at-risk countries has been addressed, offering little meaningful relief.

In their open letter, the experts call on global leaders to take urgent and bold action—including reducing unsustainable debt burdens, reforming how the IMF and World Bank assess debt sustainability, and establishing a “Borrowers’ Club” to allow countries to negotiate from a position of collective strength.

“Bold action on debt means more children in classrooms, more nurses in hospitals, more action on climate change,” the letter concludes.

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