Shafaq News/ The UN has sounded the alarm over the ballooning debt crisis, particularly in developing countries, warning it could derail global progress towards sustainable development.

A new report by the UN Trade and Development agency (UNCTAD) titled "A World of Debt 2024" highlights a surge in global public debt, reaching a record $97 trillion in 2023, up from $91.4 trillion the year before.

"This unprecedented debt accumulation is a growing burden to global prosperity, especially for developing countries," said UNCTAD Secretary-General Rebeca Grynspan.

The report finds Africa particularly hard-hit, with the number of countries facing high debt-to-GDP ratios (above 60%) soaring from six in 2013 to 27 in 2023.

Developing countries are disproportionately affected by rising interest rates, according to the report. In 2023, they paid $847 billion in net interest, a 26% increase year-on-year. Borrowing costs for these nations are significantly higher than for developed economies.

"The rapid rise in interest payments is squeezing budgets in developing countries," the report says. "Half of these countries now dedicate at least 8% of government revenue to debt servicing, double the figure of a decade ago."

The report said that the home countries of 3.3 billion people spend on debt interest more than education or health. In Africa, the average person spends more on debt interest ($70) than on education ($60) and health ($39) combined.

The report proposed a plan to revamp the global financial system and boost the UN's Sustainable Development Goals (SDG) stimulus package to tackle the current debt crisis.

These, according to the report, will entail efforts to:

1. Improve the effective participation of developing countries in the governance of global financial systems.

2. Tackle the rising cost of debt and risk of debt distress through an effective debt workout mechanism.

3. Expand contingency finance to provide greater liquidity in times of crisis, so that countries are not forced into debt as a last resort.

4. Massively scale up affordable and long-term financing by mobilizing multilateral development banks and private resources.