Developing Countries Spend More on Debt Than Education
· business
The Debt Trap: How Developing Countries Are Sacrificing Education for Foreign Loans
The latest report from UNESCO paints a stark picture of the debt crisis afflicting developing countries. In 113 nations, governments spent less on education than they did on servicing their foreign debts in 2025. Sub-Saharan Africa’s nations devoted a staggering 3.6 times as much to debt repayment as they did to education.
The precipitous decline of aid to education worldwide is hardly surprising. Global assistance is predicted to drop by up to 30% by 2027, exacerbating an already dire situation. Low-income countries have lost 21% of their educational funding since 2023 and face further cuts in the coming years. In some nations, such as Afghanistan, Mali, Niger, and Liberia, aid has evaporated at a rate of over 40% in just three years.
The consequences are far-reaching and devastating. Education is essential for individual development and a key driver of economic growth. By prioritizing debt repayment over education, governments sacrifice their future competitiveness and capacity to manage finances sustainably. The cycle of austerity, underinvestment, and stagnation is perpetuated, undermining domestic revenue mobilization and ultimately diminishing the ability to handle debt burdens.
The actions of private lenders, often based in Britain and the US, compound the problem. These creditors prioritize extracting maximum profits over supporting developing nations’ development. They frequently block agreements aimed at reducing debt, as seen recently in Ethiopia. The UK’s upcoming presidency of the G20 in 2027 offers a crucial opportunity to reform the debt-relief process, incorporating English law to prevent private creditors from disrupting and holding out for more profit.
The implications of weakened education systems are profound. They can have far-reaching effects on public health, economic growth, and social cohesion. The World Bank estimates that every dollar invested in primary education yields a return of up to $10 in economic growth. Conversely, neglecting education perpetuates cycles of poverty and inequality.
Developing countries’ struggles with debt highlight the need for a fundamental transformation in how we structure debt relief. Rather than offering short-term fixes or band-aid solutions, long-term arrangements that enable developing nations to fund public services sustainably are needed. This requires prioritizing the needs of borrowing countries over the interests of private creditors.
The case for change is clear: education is not a luxury but an essential investment in human capital and economic development. By redirecting our priorities towards supporting developing nations’ educational efforts, we can break the cycle of debt and underinvestment, creating more stable and prosperous societies worldwide.
Reader Views
- DHDr. Helen V. · economist
While the report highlights the egregious prioritization of debt repayment over education in developing countries, it's essential to consider the broader structural flaws driving this cycle. The article notes that private creditors often block debt relief agreements, but what's missing is a critical examination of how these lenders profit from the very poverty they claim to alleviate. The focus should shift towards reforming the debt-relief process and implementing measures to hold these creditors accountable for their role in perpetuating this crisis.
- MTMarcus T. · small-business owner
It's time for the G20 to stop shuffling blame and take concrete action on debt relief. The report highlights a stark reality, but what's missing is how these nations can break free from this vicious cycle. Governments need to re-evaluate their priorities and negotiate with private creditors to secure better loan terms, rather than simply relying on foreign aid. This requires a shift in mindset - from accepting handouts to building domestic capacity for sustainable growth.
- TNThe Newsroom Desk · editorial
While the UNESCO report highlights the alarming trend of developing countries sacrificing education for debt repayment, it's essential to acknowledge that this crisis is also driven by outdated lending practices. Many creditors are pushing for debt restructuring under English law, which prioritizes their own interests over debtor nations' needs. This approach only perpetuates the cycle of poverty and stagnation. It's time for a more equitable framework, one that takes into account each nation's unique economic circumstances and development goals. The UK's G20 presidency in 2027 presents an opportunity to reform the debt-relief process and prioritize sustainable development over profit.