Angola and Mozambique are among the five countries in the world where the cost of interest on public debt represents the largest share relative to Gross National Income (GNI), according to a World Bank report released this Wednesday. “The five countries with the highest external debt interest payments relative to export revenues in 2024 were Mozambique, Senegal, Mongolia, Egypt and Colombia; the five countries with the highest interest payments relative to Gross National Income were Mozambique, Mongolia, Angola, Senegal and Lebanon,” reads the World Bank’s global debt report.
In response to Lusa’s inquiry, the World Bank clarified that the situation had already been negative for both Portuguese-speaking African nations in 2023.
In 2023 and 2024, Mozambique recorded the highest ratio of interest payments to exports and also the highest ratio of interest payments to GNI. Angola, in 2024, had the 10th highest ratio of interest payments to exports and the 4th highest ratio of interest payments to GNI.
The previous year, Angola ranked 10th on the list of countries with the highest interest-to-exports ratio and was the third worst country globally in terms of interest-to-GNI ratio. In the International Debt Report, released today in Washington, the World Bank warns that “developing countries paid $741 billion more in external debt and interest than they received in new financing between 2022 and 2024,” representing “the largest gap in at least 50 years.”
World Bank experts present a cautious scenario regarding international financial market conditions, which have pushed several countries to issue new debt this year—such as Angola—despite interest rates hovering around 10%, nearly double the average charged to emerging economies before the pandemic. “Global financial conditions may be improving, but developing countries should not be deceived: they are not out of danger,” said Indermit Gill, Chief Economist and Senior Vice President for Development Economics at the World Bank Group, warning that as “debt accumulation continues (…) policymakers worldwide should make the most of the breathing room that exists, instead of rushing back to external debt markets.”
For many countries, turning to international markets is a viable option due to falling interest rates demanded by investors and the possibility of guaranteeing protection against currency shocks, but it is also a strategy to secure the restructuring of existing debt.
“Many countries avoided bankruptcy risks by restructuring their debt; in total, developing countries restructured $90 billion in external debt in 2024, the largest volume since 2010,” the World Bank further notes.
Last year, the external debt of middle- and low-income countries reached a record $8.9 trillion, with $1.2 trillion owed by the 78 countries eligible for World Bank International Development Association (IDA) loans. Interest on debt issued in 2024 recorded the highest level in 24 years.
“In total, these countries disbursed a record $415 billion just in interest payments—resources that could have been allocated to education, primary healthcare and essential infrastructure,” the report’s authors highlight, concluding that only multilateral development banks are able to provide low-cost financing.
In the case of the World Bank, they state, $18.3 billion more was delivered than what was received in repayments and interest, in addition to $7.5 billion provided to the poorest countries in donations.
Source: Lusa
