Borrowing can pay for roads, schools and clinics, but in many developing countries interest bills now take more public money than health or education, and the tools for easing unsustainable debt work slowly and reach few countries.
Written from the sources listed below, not independently peer-reviewed.
How many people live in countries where the government spends more on interest payments than on either health or education?
3.4 billion
People in countries that spend more on interest than on health or education
At least one in three developing countries. Averages for 2021 to 2023: 45 countries spent more on interest than on health and 22 more than on education.
Data year 2023. Source: UN Trade and Development, 2025
US$415 billion
Interest paid on external debt by low- and middle-income countries
A record, paid in 2024. Between 2022 and 2024 these countries paid US$741 billion more to creditors than they received in new financing.
Data year 2024. Source: World Bank, 2025
32 of 67
Low-income countries in or at high risk of debt distress
9 in debt distress and 23 at high risk as of 31 March 2026, among the low-income countries rated under the IMF-World Bank framework; 27 were at moderate and 8 at low risk.
Data year 2026. Source: International Monetary Fund, 2026
Unit: % of exports
SDG indicator 17.4.1 for all low- and middle-income countries combined (World Bank International Debt Statistics). Principal and interest on external debt divided by exports of goods, services and primary income. Selected reported years; the ratio eased in 2024 but remained well above its early-2010s level.
Target 17.4 sets no numerical goal. Its indicator, debt service as a share of exports, was 13.1% for low- and middle-income countries as a group in 2024, down from 15.4% in 2023 but above the 9.1% of 2010. Behind the average, many low-income countries remain in or close to debt distress.
In Africa, governments spent on average about US$70 per person a year on interest in 2021 to 2023, more than on education (US$63) or public health (US$44).
Source: UN Trade and Development, 2025In 2024, 61 developing countries spent 10% or more of government revenue on interest payments, twice as many as in 2010.
Source: UN Trade and Development, 2025Developing regions borrow at interest rates two to four times those paid by the United States, and the gap has widened since 2020, especially for Africa.
Source: UN Trade and Development, 2025In the 22 most heavily indebted developing countries, on average 56% of people could not afford a minimum healthy diet; in the 18 of them eligible for IDA's low-cost lending, the share was nearly two-thirds.
Source: World Bank, 2025Each country is shaded by its latest available value, so you can see where the gap is widest. Hover or tap a country, search for one, or open the full table.
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Values in % of exports.
Principal and interest paid on external debt as a share of exports of goods, services and primary income (SDG indicator 17.4.1). Latest year per country, mostly 2024; values before 2020 are hidden. Covers only low- and middle-income countries that report to the World Bank Debtor Reporting System, so high-income countries are blank. Single-year values can jump when large loans or bonds fall due or are refinanced, and the ratio leaves out domestic debt.
Source: World Bank International Debt Statistics, via World Bank Open Data. Latest year available per country; years differ.
Values load from World Bank Open Data. Simplified Natural Earth borders; they imply no position on disputed territories.
Instead of one “percent solved” score, DO GOOD rates three separate dimensions. A problem can have mature solutions that still reach too few people. These ratings are an editorial reading of the sources on this page, not a measured index.
Has the situation improved in the real world?
LowInterest paid by developing countries reached records in 2023 and 2024, net debt flows to them were negative over 2022 to 2024, and in many developing countries interest payments exceed spending on health or education.
How mature and validated are the available solutions?
ModerateDebt sustainability assessments, coordinated restructuring, concessional lending and pause clauses are established tools, but UNCTAD and the IMF themselves point to gaps: restructurings take longer than in past decades, the Common Framework lacks automatic payment suspension, and swaps cannot fix unsustainable debt.
How widely are effective solutions actually used?
LowThe Common Framework is open only to a limited set of low-income countries, the World Bank's climate-resilient debt clauses are limited to eligible small states, and debt swaps have historically averaged about 100 million a year in face value.
External debt of low- and middle-income countries is well documented through the World Bank's debtor reporting system. Domestic debt, some collateralised and state-company borrowing, and timely spending data are less complete, and comparisons of interest with health or education rely on averages over several years.
In 2024 debt service fell relative to exports, the World Bank's net lending and grants to the poorest countries reached records, and more debt was restructured than in any year since 2010. Interest costs nevertheless kept rising and a large share of low-income countries remain in or near debt distress.
Governments borrow to invest and to get through crises, and public debt that is used well can support development. The problem starts when repaying it takes so much of a country's revenue that spending on health, education, nutrition or climate adaptation has to be squeezed. UNCTAD estimates that global public debt reached US$102 trillion in 2024, of which developing countries owed US$31 trillion, almost twice their share of 2010. Developing regions borrow at interest rates two to four times higher than the United States, and in 2024, 61 developing countries spent at least 10% of government revenue on interest, twice as many as in 2010.
The World Bank's International Debt Report 2025 found that low- and middle-income countries paid a record US$415 billion in interest on their external debt in 2024, and that between 2022 and 2024 they paid out US$741 billion more in principal and interest than they received in new lending, the widest gap in at least 50 years. The pressure falls hardest on low-income countries with few other sources of finance: by March 2026 the IMF rated 9 low-income countries as already in debt distress and 23 more at high risk. When a government runs short, it may delay salaries, cut services or default, and restructuring its debt has become slower than in earlier decades.
SDG target 17.4 asks the international community to help developing countries reach long-term debt sustainability through coordinated debt financing, debt relief and debt restructuring, and to reduce debt distress in highly indebted poor countries. No single number defines a debt problem; the measures used most often are:
Debt service relative to exports
SDG indicator 17.4.1: principal and interest paid on external debt as a share of a country's earnings from exports of goods, services and primary income. It shows how much foreign currency income goes to creditors. It is compiled by the World Bank's International Debt Statistics for low- and middle-income countries.
Interest relative to government revenue
The share of tax and other government revenue spent on interest on all public debt, domestic and external. UNCTAD uses 10% of revenue as a warning threshold.
Interest compared with social spending
UNCTAD compares each government's interest bill with its public spending on health and on education, averaged over 2021 to 2023, and counts the people living in countries where interest is larger.
Risk of debt distress
The IMF and World Bank rate low-income countries as at low, moderate or high risk of debt distress, or already in debt distress, based on projections of debt and repayment burdens under the joint Debt Sustainability Framework for Low-Income Countries.
What works
When debt cannot be repaid, creditors agree to reduce or reschedule it alongside an IMF-supported programme. The G20 Common Framework brings traditional and newer official lenders to one table, and developing countries restructured US$90 billion of external debt in 2024, the most since 2010, with some cutting long-term external debt by up to 70%.
Limits
Restructurings since 2020 have taken longer than in earlier decades, the Common Framework is open to only a limited group of low-income countries and has no automatic pause on payments while talks go on, and agreeing comparable treatment between official and private creditors is slow.
What works
Concessional finance lets the poorest countries invest without taking on expensive market debt. In 2024 the World Bank provided a record US$18.3 billion more in new financing to IDA-eligible countries than it received back in repayments, plus a record US$7.5 billion in grants.
Limits
These flows are small relative to the interest bills and investment needs of developing countries, depend on donor contributions, and do not reach many middle-income countries that also face high borrowing costs.
What works
Loan terms that let a country defer principal and interest after a disaster free cash when it is most needed. In November 2024 the World Bank extended its clauses to droughts, floods and pandemics as well as earthquakes and storms, and to existing loans of small states; 14 small states had signed and one had used the clause.
Limits
Payments are deferred, not forgiven, and the clauses cover only eligible borrowers and the lenders that offer them. Most debt owed to private bondholders and many bilateral lenders still has no such clause.
What works
A creditor or third party helps replace existing debt with cheaper debt, and the government commits part of the savings to conservation, climate action, education or other agreed goals. Recent examples include Barbados, Belize, Ecuador and Gabon.
Limits
The IMF and World Bank note that swaps are complex and costly to arrange, too small to restore solvency, unsuitable for countries whose debt is unsustainable, and can make budgets more rigid. Between 1987 and 2021 the face value of debt swapped averaged only about 100 million a year.
What works
The joint IMF-World Bank framework regularly rates the debt risk of 68 of the 70 countries eligible for the IMF's concessional lending, which guides how much lenders offer as grants rather than loans and signals when relief is needed.
Limits
A risk rating does not itself provide relief, and its projections depend on assumptions about growth, interest rates and exports that can turn out too optimistic.
Promising, but not proven at scale. The stage shows how far each approach has come; it is not a recommendation.
Several governments and development banks are working to make debt pause clauses standard in bonds and loans, with common wording so that private lenders also defer payments after major shocks. Whether bond investors accept them without charging much higher rates is still being tested.
The IMF and World Bank have set out a framework for when swaps make sense and how to make them less transaction-heavy, recommending them mainly for countries with sustainable debt facing temporary cash shortages. Results in terms of extra spending and outcomes are not yet well documented.
UNCTAD and others propose reforms such as automatic suspension of debt service during negotiations, wider country eligibility and clearer rules for sharing losses among creditors. These remain proposals discussed in international forums rather than agreed mechanisms.
Implementation gap
Interest rates on new bond issues by developing countries hovered around 10% in 2024, roughly double the levels before 2020, which makes refinancing old debt costly.
Implementation gap
Low- and middle-income countries paid US$741 billion more to their external creditors than they received in new financing between 2022 and 2024, leaving less for public investment.
Coordination gap
Debts are now owed to bondholders, commercial banks, traditional and newer bilateral lenders and multilateral banks, each with different rules. Agreeing comparable relief among them is a main reason restructurings since 2020 have taken longer than in previous decades.
Coordination gap
The Common Framework is open only to a limited set of low-income countries, and payments continue to fall due while negotiations take place, which can deepen a crisis before relief arrives.
Knowledge gap
Of 86 countries with data, more than half saw domestic government debt grow faster than external debt, but domestic borrowing is less well recorded and is outside most international relief arrangements.
Technology gap
Recording, monitoring and negotiating debt requires skilled staff and reliable systems. The IMF notes that in low-capacity settings complex transactions such as swaps can divert resources from core debt management.
Unresolved questions, not vetted breakthroughs. Answering any of them would change what is possible.
It is clear that interest competes with social spending in budgets, but how much high debt service actually reduces school enrolment, health coverage or nutrition, compared with other causes, is not well established.
It is unclear how often money committed through swaps adds to what governments would have spent anyway on conservation or education, and how swaps compare in value with direct grants.
There is no agreed method for comparing the relief given by bondholders, banks, bilateral and multilateral lenders, and whether multilateral banks should ever take losses remains contested.
Clauses that let a country defer payments after a disaster may make lenders demand higher interest rates, or they may lower risk overall. Evidence on how markets price them is still thin.
Debt is easy to misreport. When you read or share claims about a country's debt, look up the original figures in open sources such as the World Bank's International Debt Statistics or UNCTAD's World of Debt dashboard.
Pension funds and investment funds often hold government bonds of developing countries. You can ask your fund whether it has a policy on responsible sovereign lending, transparency and taking part in restructurings.
Donate to or volunteer with established organisations that help citizens and journalists follow public budgets and borrowing in their own countries, and check what evidence they publish about their work.
Governments decide on aid budgets, contributions to development banks and positions in debt negotiations. Whatever your view, you can write to your representatives or take part in public consultations on development finance.
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UN Trade and Development (UNCTAD), published 2025
Annual UNCTAD report on public debt (UNCTAD/OSG/TT/INF/2025/4). Source of global and developing-country public debt in 2024, the 3.4 billion people in countries spending more on interest than on health or education, counts for health and education, the 61 countries spending 10% or more of revenue on interest, per-person spending in Africa, borrowing cost comparisons and reform proposals for the Common Framework.
World Bank (press release, 3 December 2025), published 2025
Launch of the International Debt Report 2025 (data for end-2024). Source of the record US$415 billion in interest, the US$741 billion net outflow over 2022 to 2024, US$90 billion restructured, bond rates around 10%, World Bank net financing and grants to IDA countries, domestic debt growth and diet affordability in highly indebted countries.
World Bank, International Debt Statistics (World Bank Open Data API), published 2025
Time series of SDG indicator 17.4.1 for all low- and middle-income countries combined, from the data underlying the International Debt Report 2025. Source of the trend and target status values.
International Monetary Fund, published 2026
Latest debt-distress risk ratings under the joint IMF-World Bank framework for low-income countries. Source of 9 countries in debt distress, 23 at high, 27 at moderate and 8 at low risk, and of 68 of 70 eligible countries using the framework.
International Monetary Fund and World Bank (IMF Policy Paper, August 2024), published 2024
Joint staff paper on when debt swaps are useful. Source of their limits (not suited to unsustainable debt, transaction costs, budget rigidity, too small to restore solvency), recent examples and the historical average of about 100 million a year in face value swapped from 1987 to 2021.
World Bank (12 November 2024), published 2024
Description of the World Bank's expanded Climate Resilient Debt Clauses. Source of the hazards covered, extension to existing loans of small states, and the 14 small states that had signed and one that had activated a clause.
DO GOOD International (2026). Debt That Doesn't Crowd Out Development. Global Challenges. Updated October 15, 2026. https://www.dogood.world/challenges/sovereign-debt
For figures, please cite the original sources listed above.