In 2025, the architecture of economic power continues to disadvantage nations in the global south, particularly through crippling sovereign debt. By early 2024, these countries faced a staggering public debt of around $29 trillion, exacerbated by a global pandemic and rising costs. Debt servicing now consumes resources better spent on health and education. Despite Africa being a comparatively low-risk investment venue, international perceptions lead to prohibitively high borrowing costs. Thus, developing countries find themselves in a debt trap, caught between serving international financial credibility and meeting domestic needs.
average borrowing costs in Africa are almost 10 times higher than for the US, fueled by perceptions of risk propagated by international credit rating agencies.
One-third of these fragile countries have to allocate more to servicing interest as much as 14% of domestic revenue than to healthcare, education or climate resilience.
These countries have been trapped in a cycle of borrowing to survive and repaying to remain credible in the eyes of the international financial order.
The terms of this credibility have always been set elsewhere, primarily in western capitals, behind the closed doors of international financial institutions.
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