By Africa.com | Created at 2024-12-06 08:58:02 | Updated at 2024-12-22 04:09:42
2 weeks ago
According to the World Bank’s latest International Debt Report, developing countries spent a record $1.4 trillion on external debt servicing in 2023, as interest rates soared to their highest in 20 years. The report noted that interest payments alone surged 30% to $406 billion for the year, straining budgets for critical sectors like health and education. It also noted that low-income nations, eligible for International Development Association (IDA) support, were the most affected. On average, these countries allocated nearly 6% of their export earnings to interest payments. However, some low-income countries spent as much as 38% of their export earnings. Although they were not designed to provide such roles, multilateral institutions, including the World Bank, served as lenders of last resort to these countries, providing $51 billion more in financing than they collected in debt payments. The findings emphasize growing financial strain amid tighter global credit conditions and rising borrowing costs.
SOURCE: NAIRAMETRICS
