Overview

• The Vatican-commissioned Jubilee report criticizes the “perfect storm” of COVID-era borrowing, rising interest rates and a global slowdown that forces developing governments to prioritize debt payments over essential services.
• The commission found that developing states now allocate 10% or more of tax revenues to interest payments, with average interest costs nearly doubling since 2014.
• In Africa, 57% of the population reside in countries where debt servicing outstrips education and healthcare spending, deepening inequality and social unrest.
• Recommendations include a HIPC II-style restructuring framework, binding rules in London and New York to ensure private creditors share losses and debt-for-nature swaps to link relief with climate action.
• Policy-makers will debate these proposals at the UN Financing for Development conference in Seville later this month to explore an intergovernmental process for overhauling sovereign debt architecture.