Data

Open Letter to Ministers of Finance and Governors of Central Banks, the Governors and Alternate Governors of the World Bank Group and International Monetary Fund, and the Leaders of the International Financial Institutions 

Ahead of the forthcoming World Bank Group and International Monetary Fund Annual Meetings, we implore leaders to urgently address the unsustainable debt challenges facing low- and middle-income countries and turn debt into hope. 

The problem is clear: countries around the world are paying exorbitant debt servicing costs instead of paying for schools, hospitals, climate action or other essential services. Many of these countries are not formally defaulting on debt, but they are defaulting on development. African governments now spend an average of 17% of revenues on debt servicing. A cap of 10% in 21 countries could unlock enough money to provide clean water and sanitation to roughly 10million people, as well as avert roughly 23,000 under-5 deaths each year.1

Current action is inadequate and slow: so far, the G20's plan to tackle this problem has relieved just 7% of the total value of external debt owed by at-risk, lower-income countries.2

There are common-sense, effective and practical solutions that leaders can put in place to restore growth, stability and hope across the world. 

We urge leaders to deliver meaningful debt relief now and prevent future debt crises through: 

  1. Urgently reducing current debt burdens and servicing costs, including the World Bank and IMF replenishing their debt-relief funds, and ensuring that countries can access a range of debt relief options that fit their unique circumstances. 

  2. Innovation and reform to ensure fair and fast debt restructuring, using the existing policy toolkit of international financial institutions more effectively to avoid World Bank and IMF financing being used to bail out the holders of unsustainable debts, supporting changes to debt legislation to discourage hold-out creditors, and reforming the Common Framework process to make it more efficient and fairer. 

  3. Reforming how the World Bank and IMF assess debt. They must conduct debt sustainability analyses (DSAs) that are transparent, accountable, accurately reflect risks, and incorporate development and climate needs. 

  4. Promoting strategic alliances amongst borrowers. Support a 'Borrowers' Club' so that borrowers can negotiate from a position of strength and accountability as regards debt resolution and prevention. 

Bold action on debt means more children in classrooms, more nurses in hospitals, more action on climate change, more jobs, more trade, and less need for aid. These are outcomes that serve the global interest. We call on you to act decisively and with ambition to unlock stability, growth, and hope for the years ahead. 

Signed, 

On behalf of commissioners and experts contributing to Healthy Debt on a Healthy Planet, The UNSG's Expert Review on Debt, and The Jubilee Report. 

  1. Joseph Stiglitz, Professor, Columbia University; Founder and Co-President, Initiative for Policy Dialogue 
  2. Martin Guzman, Professor, Columbia University, SIPA; Co-President, Initiative for Policy Dialogue 
  3. Moritz Kraemer, Chief Economist and Head of Research at LBBW Bank; Senior Fellow, Centre of Sustainable Finance, SOAS, University of London 
  4. Vera Songwe, Chair and Founder, Liquidity and Sustainability Facility; Non-Resident Senior Fellow, Global Economy and Development, Brookings 
  5. Trevor Manuel, Former Minister of Finance of South Africa, Chair of Africa Expert Panel 
  6. Mahmoud Mohieldin, United Nations Special Envoy, Financing the 2030 Agenda 
  7. Paolo Gentiloni, Former Prime Minister of Italy, former European Commissioner for Economy 
  8. Ishac Diwan, Professor of Economics, American University of Beirut, and Finance for Development Lab 
  9. Yan Wang, Senior Academic Researcher at the Boston University Global Development Policy Centre 
  10. Daouda Sembene, Founder and CEO, AfriCatalyst  
  11. Kevin Gallagher, Professor, Boston University; Director, Global Development Policy Centre 
  12. José Antonio Ocampo, Professor, School of International and Public Affairs, Columbia University 
  13. Mavis Owusu-Gyamfi, President and CEO, African Centre for Economic Transformation 
  14. Adam Tooze, Professor, Columbia University; Director, European Institute 
  15. Mariana Mazzucato, Professor University College London; Director, Institute for Innovation & Public Purpose 
  16. Stefano Zamagni, Professor of Economics, University of Bologna 
  17. Marcus Miller, Emeritus Professor, University of Warwick  
  18. Patrick Bolton, Professor of Finance and Economics, Imperial College London 
  19. Jayati Ghosh, Professor, University of Massachusetts Amherst 
  20. Arjun Jayadev, Professor, Azim Premji University and Senior Economist 
  21. Marina Zucker-Marques, Senior Academic Researcher, Global Economic Governance Initiative, Boston University Global Development Policy Centre 
  22. Marilou Uy, Non-Resident Senior Fellow, Global Economic Governance Initiative, Boston University Global Development Policy Centre 
  23. Alistair Dutton, Secretary General of Caritas Internationalis 
  24. Grieve Chelwa, Associate Professor of Political Economy, The Africa Institute




Footnotes

Footnotes

  1. IEJ Sovereign Debt Working Paper Series #1 – Diverting Development: The G20 and External Debt Service Burden in Africa – April 2025.
    Also see Reforming the Global Financial Architecture: 2025 Country Simulations by the African Center for Economic Transformation (ACET). ↩

  2. Data on debt relief refers to the net present value (NPV) of debt relief agreed for Zambia and Ghana at $13 billion, as analysed in The Lower-Income Country Debt Crisis by Debt Justice.
    This is compared to the total NPV of external debt for lower-income countries (those with a LIC-DSF) at high risk or in debt distress — $184 billion — calculated by ONE from DSA reports. ↩