As the African Union (AU) Summit takes place this week, a new report by ActionAid highlights a striking economic injustice: over three-quarters of all lower-income countries spend more on foreign debt repayments than on their healthcare systems, and more than half allocate more to debt servicing than to education.
Rich, high-emission countries owe Uganda an estimated $1.7 trillion in climate debt, part of a larger global figure of $107 trillion owed to low- and lower-middle-income countries. This is over 70 times the total foreign debt of $1.45 trillion that these nations collectively owe.
The Debt Crisis and Climate Justice
The report reveals that Uganda is paying more to service foreign debt than it invests in essential public services such as healthcare and education.
The publication, titled “Who Owes Who? External Debts, Climate Debts, and Reparations in the Jubilee Year”, launched ahead of the AU Heads of State Summit in Addis Ababa, exposes how Africa’s unpaid climate debts far exceed the external debts African nations are forced to repay.
While Uganda owes $15 billion in foreign debt, it is owed a staggering $1.7 trillion in climate reparations. The country is forced to pay $960 million annually in debt repayments, diverting crucial resources from its development priorities. In 2024, Uganda allocated 14.3% of its budget to debt servicing, but far less to critical sectors, only 4.88% to health and 8.4% to education.
A Call for Fairness and Accountability
“It is a travesty that African nations are being crushed under the weight of foreign debt while the world’s richest countries evade their responsibility for the climate crisis and historical injustices such as colonial exploitation and unfair trade practices,” said Arthur Larok, Secretary General of ActionAid International.
By prioritising debt repayment over essential services and climate response, rich countries are pushing Africa to the brink of a socio-economic and environmental disaster.
In 2024, lower-income African countries paid $60 billion in debt repayments, sacrificing investments in healthcare, education, and climate resilience. The report emphasises that rich countries should pay at least $1.4 trillion annually to Africa in climate finance to compensate for the damage caused by their emissions.
Xavier Ejoyi, Country Director of ActionAid International Uganda, stated: “It is only fair that the countries responsible for climate change pay for the damage they have caused. This funding could support sustainable farming practices such as agroecology, which benefits smallholder producers while protecting the environment.”
Chikumbutso Ngosi, Young Urban Women Programme Manager at ActionAid International, added: “Servicing external debts under IMF-imposed conditions undermines spending on critical sectors, disproportionately affecting women and girls. Meanwhile, rich countries evade their debts to Africa. How is that fair?”
The Global Financial System and Structural Injustice
The report underscores how the global financial system exacerbates the debt crisis in African countries. Rich nations benefit from ultra-low borrowing costs, with countries like Germany paying only 0.8% in interest rates, while African nations face extortionate rates averaging 9.8%.
With the African Union declaring 2025 as the Year of Reparations, there is an urgent need to challenge these financial injustices and establish a new, fairer system.
Actionable Recommendations
The report calls for the African Union and global movements to prioritise the establishment of a new UN Framework Convention on Debt, replacing the current colonial-era financial structure dominated by the IMF and unite in demanding debt cancellation as a partial repayment of climate debt and broader reparations owed by high-income nations.