New York, Jan. 13, 2025 (Lusa) - Angola is one of the African countries that spends more money paying interest on its debt than investing in education and health, according to the United Nations Department of Economic and Social Affairs (UNDESA).
"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, showing the difficult policy choices facing governments," according to the report on the Economic Situation and Prospects to 2025, released by the United Nations.
In the document, UN experts say that "budgetary challenges are most severe in Africa, where the rapidly rising cost of servicing debt is increasingly crowding out essential resources for public services and investment" in areas that enable economic development.
Average debt interest payments as a percentage of tax revenues in Africa reached 27% last year, up significantly from 19% in 2019 and 7% in 2007, demonstrating the impact that growing debt has on African governments' policy choices.
Some of these countries, including Angola, have to spend more than 25% of their revenue to service the interest on the debt, reads the report, released at the same time as another analysis by the non-governmental organisation Debt Justice points to Angola as the country in the world where the highest percentage of revenue (66%) is used to pay debt.
Angola will have to pay $6.2 billion (€5.9 billion) in 2025, representing 5.2% of GDP, and $5.4 billion (€5.1 billion) in 2026, representing 4.2% of GDP, which compares with the $5.4 billion the country paid in 2024, says Fitch Ratings in a recent analysis of the Angolan economy, presenting these figures as the total debt that will be paid in these years, which includes interest and payments on the maturity of the loans.
"The recent experiences of protests in Kenya and Nigeria over tax increases and economic hardship show the delicate balance that policymakers have to make between strengthening fiscal sustainability and avoiding measures that further hamper household finances and social stability," the UN economists write in the report on the economic situation in Africa.
Multilateral cooperation and global efforts are essential to alleviate the burden of debt servicing 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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