A recent report by the United Nations has revealed that most developing countries spent more on repaying foreign debt than on education in 2025. According to research by the UN’s culture and education agency, Unesco, 113 developing countries spent more on servicing foreign debt than on education. In sub-Saharan Africa, countries spent 3.6 times more on debt than education.
The situation is likely to be exacerbated by funding cuts, with global aid to education predicted to decline by up to 30%. Low- and lower-middle-income countries have already lost 21% of the aid to education they were receiving in 2023 and could lose up to 30% by 2027. Some countries, including Afghanistan, Mali, Niger, and Liberia, have already lost more than 40% in three years.
Min Jeong Kim, director of Unesco’s education division, stated that current approaches to debt relief are keeping countries trapped in a cycle of austerity, underinvestment, and stalled development. This is weakening countries’ stances on economic growth, eroding domestic revenue mobilization, and ultimately diminishing their ability to handle their debt over time.
Eighteen of the most indebted countries spent five times the amount they did on education on debt, and up to 16 times more in the case of Sri Lanka. According to the UK-based campaign group Debt Justice, repayments by poorer countries hit a 35-year high last year, with 56 countries spending almost a fifth of their total revenue on servicing loans.
Tim Jones, policy director at Debt Justice, noted that countries’ debt payments have ballooned following a series of shocks from Covid, energy price and interest rate rises, and climate disasters. In the worst-affected countries, this is leading to cuts in spending on essential services such as health and education.
The situation has been made worse by aid cuts made by the US and Europe, which saw funding to education drop by $600m in 2024. The combined impact of aid cuts and public spending being redirected to debt servicing has meant disruption to education systems, with schools often not receiving sufficient funds to operate and teachers not being paid.
Unesco has called for a change to how debt relief is structured, shifting away from short-term relief to long-term arrangements that allow countries to continue funding public services. Debt Justice has also emphasized the need for private lenders to be incorporated into the debt-relief process, to prevent them from disrupting and holding out from debt relief agreements.
