Interest payments by low- and middle-income countries have more than doubled since 2017 as a share of government revenue. The causes are contested; the arithmetic of what that leaves for health, education and infrastructure is not.
The World Bank tracks how much of government revenue goes purely to interest — before a single dollar of principal is repaid — across 89 low- and middle-income countries (LMICs) it follows closely for debt sustainability.1 In 2024, 21 of those countries spent more than a fifth of their revenue on interest; 14 spent more than a quarter; 33 spent more than 15%.1 This is a different, narrower measure than total debt service (interest plus principal) or a share of exports or GDP — this piece uses interest-to-revenue throughout and states so at each step, because the three denominators tell different stories.
Two World Bank tallies, on two different country groups, point the same way. Across all 89 tracked LMICs, interest payments hit $415 billion in 2024, 2.4× their level a decade earlier1 — implying roughly $173 billion a decade before, a figure this piece derives from that stated ratio rather than an independently published one. Among the 78 countries eligible for the World Bank's low-income lending arm (IDA), interest alone reached $34.6 billion in 2023, described by the Bank as four times the amount a decade earlier3 — implying roughly $8.7 billion then, again derived from the stated multiple. Both increases far outpace the modest growth most of these economies saw in revenue over the same period.
The G20's Common Framework, created in late 2020, was meant to give the most indebted low-income countries an orderly route to restructuring. In practice, only four countries have used it, and the process has been slow.4 Zambia requested treatment in February 2021 and reached a bondholder agreement in 2024 — roughly four years later.4 Ghana, which defaulted in December 2022, concluded its restructuring by the end of 2024.5 Sri Lanka, outside the Framework, defaulted in April 2022 and also concluded by the end of 2024.5 Ethiopia, which requested Common Framework treatment in February 2021, had not finalised its restructuring as this piece went to press.5 Every month a restructuring drags on is a month of debt service paid at the old, unsustainable terms.
The IMF and World Bank jointly rate low-income countries' debt sustainability on a four-step scale: low, moderate, and high risk of debt distress, or already in distress. As of the IMF's debt sustainability assessments reported in November 2024, 35 of the 68 low-income countries on the list were rated at high risk of debt distress or already in it, a further 25 at moderate risk, leaving just 8 at low risk.2 A separate, narrower IMF tally from October 2025, covering a different-sized set of 69 countries and a stricter "in distress or debt unsustainable" cut, counted 10 in that narrowest category6 — a reminder that "at risk" and "unsustainable" are not the same claim, and the count changes markedly depending which is used.
A consistent, single-source creditor-composition breakdown (how much of this debt is owed to bondholders, China, other bilateral lenders, and multilaterals, on one common base) could not be sourced this session: the World Bank's own reporting gives Paris Club creditors' share of "IDA PPG debt" (~10%, down from ~50% in the early 2000s) and bondholders' share of "long-term PPG external debt" across LMICs generally (~60%) — two different, not-directly-comparable denominators.1 Rather than force them into one chart, this piece states each figure with its own base and omits the Sankey exhibit a shared breakdown would have supported. Separately, this piece uses interest-to-revenue as its primary measure because that is what the clearest, most current single source (World Bank) publishes a country count against; total-debt-service-to-revenue, which would add principal repayments, is likely higher still but not published at the same country-count granularity in the sources used here. Finally, the debt-distress risk counts in Exhibit 04 are a snapshot of assessments published on a rolling basis over 2023–2025, not all struck on a single date — a genuine limitation of how the IMF/World Bank framework works, not an error in this piece's arithmetic.
That debt service now consumes a large and rising share of revenue in many low-income countries is a measured fact. Why, and what should be done about it, are both genuinely disputed.
The World Bank's own analysis attributes much of the recent rise to a global interest-rate shock — the fastest major-central-bank tightening cycle in four decades — landing on countries that had no control over it, plus currency depreciation inflating the local cost of foreign-currency debt.1 Campaigners and some economists argue this points to faster, deeper multilateral relief and reform of the Common Framework, whose four cases have each taken years to resolve.4
The IMF's own framework rates most distressed low-income countries' debt as "sustainable" even at high risk, implying the existing path — fiscal adjustment plus targeted restructuring — can still work without broader relief, and that both government borrowing choices and domestic-debt build-up (which shifted markedly after 2022) are within countries' own control.26
Every figure used in this piece, with its year, its source and its tier badge.
| Item | Year | Group | Value | Source (tier) |
|---|---|---|---|---|
| LMICs >20% revenue on interest | 2017 | 89 tracked LMICs | 9 | World Bank (T1) |
| LMICs >20% revenue on interest | 2024 | 89 tracked LMICs | 21 | World Bank (T1) |
| LMICs >15% / >25% revenue on interest | 2024 | 89 tracked LMICs | 33 / 14 | World Bank (T1) |
| Total LMIC interest paid | 2024 | All LMICs | $415bn | World Bank (T1) |
| Total LMIC interest, derived decade-ago | ~2014 | All LMICs | $173bn | Derived (2.4×), this desk |
| IDA interest paid | 2023 | 78 IDA countries | $34.6bn | World Bank (T1) |
| IDA interest, derived decade-ago | ~2013 | 78 IDA countries | $8.7bn | Derived (4×), this desk |
| IDA total debt service | 2023 | 78 IDA countries | $96.2bn | World Bank (T1) |
| LMIC external debt stock | 2023 | All LMICs | $8.8tn | World Bank (T1) |
| IDA external debt stock | 2024 | 78 IDA countries | $1.2tn | World Bank (T1) |
| LICs high risk / in distress | Nov 2024 | 68 LICs on IMF list | 35 | IMF via OMFIF (T2) |
| LICs moderate / low risk | Nov 2024 | 68 LICs on IMF list | 25 / 8 | IMF via OMFIF (T2) |
| LICs "in distress or unsustainable" (narrower cut) | Oct 2025 | 69 LICs, different list | 10 | IMF (T1) |
Held out of this piece to keep the spine focused on the revenue-share measure: