Mozambique and Angola are among the five countries worldwide where the cost of public debt interest represents the largest share relative to Gross National Income (GNI), according to the World Bank’s latest International Debt Report released this Wednesday. “The five countries recording the highest interest payments on external debt relative to export earnings in 2024 were Mozambique, Senegal, Mongolia, Egypt, and Colombia; the five countries that recorded the highest interest payments relative to GNI (Gross National Income) were Mozambique, Mongolia, Angola, Senegal, and Lebanon,” reads theInternational Debt Report. When questioned by Lusa, the World Bank specified that as early as 2023 the situation was negative for the two countries.
In 2023 and 2024, Mozambique had the highest ratio of interest payments relative to exports, as well as the highest ratio of interest payments to GNI. Angola had, in 2024, the 10th highest ratio of interest payments relative to exports and the fourth highest ratio of interest payments relative to GNI. The previous year, Angola ranked 10th on the list of countries with the highest interest payments relative to exports, and was the third worst worldwide in the ratio of interest payments to GNI.
In the International Debt Report, published yesterday in Washington, the World Bank warns that “developing countries paid out US$741 billion more in principal and interest on their external debt than they received in new financing between 2022 and 2024—the largest gap in at least 50 years.” World Bank experts present a cautious outlook on the evolution of international financial market conditions, which have led several countries to issue new debt this year, as seen in Angola, despite interest rates hovering around 10%, roughly double the average charged to emerging countries before the pandemic. “Global financial conditions might be improving, but developing countries should not deceive themselves: they are not out of danger,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics. “Their debt build-up is continuing, sometimes in new and pernicious ways.
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Policymakers everywhere should make the most of the breathing room that exists today to put their fiscal houses in order—instead of rushing back into external debt markets.” Accessing international markets is, for many countries, a viable option due to the decline in interest rates charged by investors and the assurance of no currency surprises, but it is also a solution to ensure restructuring of current debt. In all, developing countries restructured US$90 billion in external debt in 2024, more than any time since 2010,” the World Bank report adds. Last year, the combined external debt of low- and middle-income countries hit an all-time high of US$8.9 trillion—with a record US$1.2 trillion owed by the 78 mainly low-income countries eligible to borrow from the World Bank’s International Development Association (IDA), while “the average interest rate that developing economies will pay to their official creditors on their newly contracted public debt in 2024 stood at a 24-year high.”
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