We Owe Future Generations a Path Out of the Global Debt Crisis

By Ana Patricia Muñoz and George Laryea-Adjei Reprint | | Print |

A 12-year-old girl from northern Togo, orphaned and displaced to northern Benin with her siblings, is now attending school and benefiting from a cash programme, which supports vulnerable girls’ education and wellbeing. Credit: UNICEF/UNI970733/Njiokiktjien

WASHINGTON DC / NEW YORK, Jul 8 2026 (IPS) - Almost half of the world’s population now lives in countries that spend more money paying interest on their debts than on education or health. New data shows the cost of borrowing for African countries in particular rose 91% since 2020. Rising debt payments have reduced governments’ capacity to invest in children and build their human capital.

This week UN officials and government leaders gather in New York for the High-level Political Forum, where the Sustainable Development Goal on financing and global partnership (SDG 17) comes up for its in-depth review. They must go beyond short-term fixes and drive sustainable solutions to the debt crisis and its impact on children’s futures. Too many countries are struggling to keep pace with debt payments and facing a stark and painful choice: spend less on children or default. This fiscal crunch has a disproportionate impact on girls, especially in marginalized and remote communities, as efforts to narrow the gender gap in educational attainment are undercut by debt servicing. In 2024, the 10 countries facing the worst barriers to girls’ education spent, on average, four times more on debt servicing than on education.

Debt choices today are also silently eroding children’s prospects and future economic growth. UNICEF analysis shows that African countries spend, on average, just 6.5 per cent of their child-related budgets on the critical first five years of life, while G20 countries invest roughly four times as much. As debt servicing consumes an increasing share of public resources in many countries, governments face difficult fiscal trade-offs that can further reduce investments in children. The result is not only a loss for this generation, but also lower productivity, diminished human capital and weaker long-term growth. The World Bank estimates that today’s children could lose up to half of their future lifetime earnings because of deficits in learning and human capital development.

Work by the International Budget Partnership shows that the global debt crisis is also an accountability crisis. The Open Budget Survey 2025 finds that 50% of surveyed countries do not provide information on the composition of debt in their budget proposals, and just 18% publish any information on the sustainability of government finances over the next ten years. In a recent assessment of 11 African countries, only one country published a borrowing plan that was connected to the annual budget cycle and linked borrowing to specific sectors or projects. In all 11 countries, parliaments approve borrowing without access to comprehensive information on how those funds will be used or what development outcomes they are expected to deliver. Debt crises will continue to recur if governments continue to borrow without telling oversight bodies or the public how they’re borrowing, why or on what terms.

Debt transparency alone will not solve the debt crisis unless it is matched by accountability and smarter financing choices.

Domestic constituencies who live with the consequences of debt decisions should be at the heart of accountability efforts – this includes children. Legal frameworks should mandate governments to release information about who is responsible for debt decisions, what is counted as debt, what it is being used for and what tradeoffs were considered. Governments should embed debt and fiscal sustainability information into the budget process so that there can be regular scrutiny by oversight bodies. Legislators, national auditors and independent legislative bodies need technical support and mandates to deliver informed and accessible analysis of the long-term fiscal implications and risks of these decisions. That analysis must also be accessible to the public. Equipping civil society groups so that they are better able to engage with debt information and better understand how these seemingly esoteric decisions ultimately impact their health centers, schools and children, must be part of any debt accountability agenda. These accountability levers are critical to ensure debt fuels development instead of holding it back, and that public spending choices reflect the rights and needs of children.

We also need financing solutions to address the current emergency and these efforts should support rather than displace domestic accountability. The SDG bond of the Government of Benin has shown that debt instruments linked to social outcomes and public reporting are already working. Debt is not inherently the enemy of development, but must be borrowed transparently, invested productively and subject to public scrutiny. Debt relief frameworks must catch up with reality: as sovereign debt shifts toward private, foreign-currency creditors existing restructuring mechanisms leave too many countries without meaningful relief. Reforming the legal frameworks that govern sovereign debt contracts is long overdue.

The Sevilla Commitment, adopted by leaders at the Fourth International Conference on Financing for Development, underscored the value of pursuing these options and the importance of prioritizing investments in children. The High-level Political Forum should address how new financing options can avoid opacity by requiring governments to report to legislatures and the public how funds are used and by supporting civil society to track whether resources deliver tangible results.

When decisions with lifelong consequences are made behind closed doors, children inevitably lose first, and longest. We must use all the tools at our disposal to address the debt crisis and demand accountability to ensure public money works for all, especially for children and future generations.

Ana Patricia Muñoz is Executive Director, International Budget Partnership; George Laryea-Adjei is Director of Global Programme Division, UNICEF

IPS UN Bureau

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