Mon Oct 13 07:33:24 UTC 2025: ## Debt Crisis Forces African Nations to Choose Between Healthcare and Loan Repayments, Economists Warn
**Washington D.C.** – A group of over 30 leading economists and former finance officials have issued a stark warning about the crippling debt burden facing low- and middle-income countries, particularly in Africa. In a letter released ahead of next month’s World Bank and IMF annual meetings, the group asserts that escalating debt servicing costs are forcing governments to “default on development” by cutting essential services like healthcare and education.
The economists, including Nobel laureate Joseph Stiglitz, paint a grim picture: 32 African nations now spend more on servicing their external debt than on funding healthcare, while 25 allocate more to debt repayment than to education. This means critical resources are being diverted from essential public services, leaving vulnerable populations at risk.
“Countries around the world are paying exorbitant debt servicing costs instead of paying for schools, hospitals, climate action or other essential services,” the letter states.
The crisis is compounded by shrinking aid budgets, particularly from the United States, which has cut funding to key African nations. The International Rescue Committee reports that 10 of the 13 countries hardest hit by US aid cuts are located in Africa.
A recent ActionAid report further underscores the strain on healthcare systems, revealing that 97% of health workers in six African countries report insufficient wages to cover basic costs, with nearly 90% citing shortages of medicines and equipment due to budget cuts.
The economists argue that current debt relief efforts are insufficient, with the G20 framework providing relief for only 7% of the total external debt owed by at-risk countries.
They are calling for immediate and comprehensive action, including:
* **Urgent debt reduction:** Significantly lowering the debt burdens of struggling nations.
* **Reform of debt sustainability assessments:** Overhauling how the World Bank and IMF evaluate a country’s ability to manage its debt.
* **Support for a “Borrowers’ Club”:** Empowering countries to negotiate with lenders from a position of strength.
The letter concludes with a powerful appeal: “Bold action on debt means more children in classrooms, more nurses in hospitals, more action on climate change.” Failing to address this crisis, they warn, will have devastating consequences for the future development and well-being of millions across the African continent.
First Piper 