UN says Angola pays more in debt interest than in health and education – Ver Angola

“In several of Africa’s largest and most populous economies, including Angola, Egypt, Ghana, Nigeria and Uganda, debt interest payments have exceeded total spending on education and health in recent years, highlighting the difficult policy choices governments face”, says the report on the Economic Situation and Prospects to 2025, released by the United Nations.

In the document, the UN experts say that “fiscal challenges are most severe in Africa, where the rapidly rising cost of servicing debt is increasingly diverting essential resources away from public services and investment” in areas that allow economic development.

Average debt interest payments as a percentage of tax revenues in Africa reached 27 percent last year, up significantly from 19 percent in 2019 and 7 percent in 2007, demonstrating the impact that rising debt has in the political choices of African governments.

Some of these countries, including Angola, have to spend more than 25 percent of their revenue to service debt interest, reads the report, released at the same time as another analysis by the non-governmental organization Debt Justice points to Angola as the country in the world where a higher percentage of revenue (66 percent) is used to pay off debt.

Angola will have to pay 6.2 billion dollars in 2025, representing 5.2 percent of GDP, and 5.4 billion dollars in 2026, representing 4.2 percent of GDP, compared to 5.4 billion dollars that the country paid in 2024, says Fitch Ratings in a recent analysis of the Angolan economy, presenting these values ​​as the total debt that will be paid in those years, which includes interest and payments at maturity of the loans.

“Recent experiences of protests in Kenya and Nigeria over tax increases and economic hardships show the delicate balance policymakers have to strike between strengthening fiscal sustainability and avoiding measures that further strain household finances and social stability”, write UN economists in the report on the economic situation in Africa.

Multilateral cooperation and global efforts are essential to alleviate the debt service burden in many developing economies, they add, concluding that “expanding access to concessional financing, coordinated international debt relief initiatives, and strengthening global mechanisms to facilitate debt restructuring can significantly expand the fiscal space for these countries to invest in long-term sustainable development”.

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