The Friedrich Ebert Stiftung commissioned DFI to write a paper on how to integrate inequality reduction into IMF/World Bank debt sustainability. The paper presents a detailed, practical and feasible approach. It establishes the case for including inequality reduction in DSAs, then shows how to 1) identify eligible countries; 2) estimate spending needs and their inequality impacts; and 3) calculate multiplier effects on growth and tax revenues. The paper also identifies areas where more work is needed, especially in analyzing the impact of non-fiscal policies on inequality reduction, so they can be incorporated into forecasts.  It shows that the BWIs can easily include an anti-inequality module in current reviews of the Low-Income Countries Debt Sustainability Framework (LIC-DSF), and in the Staff Guidance Note and tools for the Sovereign Risk and Debt Sustainability Framework (SRDSF), similar to their existing climate modules. The paper argues that these reviews should emphasize the high positive multipliers SDG spending can have on growth and, if concessionally funded, SDG 10 can be reached without compromising debt sustainability.

DFI was invited to a technical meeting of experts, to advise on the technical preparations for the UNCTAD Borrowers’ Club, which was mandated in the Compromiso de Sevilla of the Financing for Development conference in July 2025. The meeting was held inthe sidelines of the IMF-World Bank meetings in Washington and followed a meeting of developing country ministers on 15 October which strongly endorsed the creation of a Borrowers’ Club. DFI has already been advising UNCTADs pilot phase of the Club for a year and presented suggestions arising from the positive lessons of the Heavily Indebted Poor Countries’ Finance Ministers’ Network (1998-2014) as well as the OIF Lower-Income Francophone Finance Ministers’ Network (2014-2020). The meeting made clear that the Club will be governed and led by ministers of the participating countries and is intended to reinforce country voice and capacity at ministerial and technical level, through ministerial meetings, inter-regional workshops and information exchange, and South-South capacity-building.

24 top global economic experts have published an open letter defining their top priorities to resolve the current global South debt crisis. The experts were the members of the three major global commissions which reported on how to resolve the debt crisis in 2024: the Jubilee Commission, the UNSG’s Expert Review, and Healthy Debt on a Healthy Planet. Their headline recommendation was that all debt relief deals should aim to reduce debt service burdens to 10% of budget revenue, a policy position DFI has been suggesting since 2022.  The letter was coordinated by the ONE campaign and covered in the Guardian on 12 October.

The latest DSW Briefing shows that in 2025, debt service is absorbing 45% of budget revenue and 35% of spending across the global South, even worse than in 2024 and the worst since records began. It exceeds total spending on education, health and social protection combined by 20%, and 5.2 billion of the world's citizens live in coutries where debt service exceeds social spending. There has been no progress on debt relief since last October, with current agreements leaving countries paying 76% of their revenue in debt service. Meanwhile, due to lack of debt relief and aid cuts, millions more children are out of school, and millions more people are dying of HIV/AIDS and hunger. The briefing makes four suggestions for ways forward: 1) setting a target of 10% debt service/revenue for all debt relief agreements; 2) cancelling debt service above this level in a 10-year "Jubilee holiday" for poorer countries; 3) taking more radical measures to reduce borrowing costs for wealthier countries; and 4) immediate 5-year debt service cancellation when countries are hit by natural disasters. It urges the South African G20 presidency to pursue genuine debt relief, ask like-minded creditors to cancel their debt service, and support a Borrowers' Club.

DFI led this workshop for LATINDADD staff and partners, which discussed the very high burden of debt service in Latin America, drawing on the Debt Service Watch (DSW) 2025 database, and suggesting implications for the Jubilee debt cancellation campaign asks. 43 participants from 13 countries attended the webinar. DFI presented the methodology of the DSW database and its findings for 2025, which show that the debt crisis in LAC is worsening sharply. For the 16 Latin American countries at the workshop, average debt service has risen to 37% of revenues, 32% of spending, twice as high as education or social protection spending and three times health spending. But when all of LAC is analysed, the numbers rise much higher, to an average 49% of revenues.

Austerity is making the crisis worse, and debt conversions and refinancings are providing little or no fiscal space to increase spending on citizens’ key social needs. DFI suggested real solution: a 10% of revenues debt service cap, a 10-year debt service holiday, measures to reduce the domestic debt burden and special measures for disaster-hit countries. The workshop was highly interactive with participants validating the DSW data or providing more alternative national sources, and supporting the suggested detailed campaign planks for the Jubilee campaign.

DFI gave the keynote presentation launching a report to the G20 on Africa’s Inequality Crisis, in a side-event at the G20 Finance Ministers’ Meeting in Durban. The report drew heavily on the Commitment to Reducing Inequality Index report released in 2024. It emphasised the rise of extreme inequality of income and wealth in Africa, as well as of a popular movement to reduce inequality sharply led by the Fight Inequality Alliance, which has led to the African Union introducing a target to reduce inequality across the continent by 15% by 2033. The G20 should tackle this issue because inequality has been proven to undermine growth and financial stability. DFI presented the findings of the CRI 2024 and the policy recommendations for African governments and the G20, with the latter focussing on helping to accelerate progressive tax collection (including on wealth), providing debt relief and increasing concessional financing. DFI’s presentation can be found here, and the Oxfam briefing can be found here

Following the 2024 Commitment to Reducing Inequality report, DFI has partnered with the African Council of Churches and a group of Scandinavian civil society organisations (Norwegian Church Aid, ACT Church of Sweden, and Felm), to produce a report analysing the extreme levels of inequality in Eastern and Southern Africa and defining a policy agenda to cut it dramatically.  

Eastern and Southern Africa is a global epicentre of extreme inequality, with two-thirds of its countries having very high income inequality, and even higher wealth inequality. Extreme inequality is increasing poverty and hunger, corroding politics, destroying citizen trust in governments, and sparking political unrest, fuelling division, and slowing growth.

The report finds that most of the governments in Eastern and Southern Africa are rowing backwards on policies to reduce inequality, so it will rise even higher in future. Since 2022, 80% of governments have cut spending on key anti-inequality social programmes; 50% have made their tax systems less progressive; and 90% have failed to apply minimum labour rights (especially for women) and allowed minimum wages to fall way behind high inflation. In addition, the region is now being hit by its worst ever debt crisis, austerity and aid cuts. Based on these findings, the report defines an urgent policy agenda for governments to accelerate their efforts to fight inequality, and for the international community to help them through comprehensive debt relief, an end to austerity and more concessional financing.

DFI has today released the 2024 summary database for Debt Service Watch, the findings of which have been reported in our recent G20 Debt Relief Briefing, our SIDS Debt Relief Proposal and our Debt and Education Briefing, as well as in the Guardian on 20 November. The key findings of the database are that debt service has risen sharply as a percentage of budget revenue across countries borrowing from the World Bank, from the 38% reported in October 2023 to 43%. This is partly because the database has been widened to cover 144 countries, up from 139 last year, but also reflects a further rise in debt service compared to all economic aggregates and social spending. Due to inaction by the G20 during 2024, the global debt crisis has continued to get even worse. You can find the summary database here.

The United Nations Sustainable Development Goal 4 (SDG 4) aims to provide quality and equitable education to all by 2030. Progress has been slow and virtually nil post-COVID. As a result, only one in six countries is predicted to meet the goal. Post-COVID, gaps in education completion and learning outcomes between the global North and South are growing, and 84 million children may be out of school in 2030.

This briefing shows that a large and escalating debt crisis is already derailing SDG 4. Since 2015, the share of budgets devoted by governments to education has fallen from 14.4% to 13.7%, and only 13.1% in low- income countries. This is mainly because (as shown by the Debt Service Watch database) debt service is increasingly pushing aside other spending, absorbing an average of 42% of all government spending in 2024 (rising to 47% in 2025). Globally, debt servicing exceeds education budgets by 2.8 times. Among LICs and LMICs - who have the largest financing needs to meet SDG 4 – it is 2.9 and 3.1 times higher; and the same is true for the regions furthest behind on SDG4 – Africa (3.2 times) and Asia (2.9 times). In 16 countries, debt service is more than five times as high as education spending.

The UN Global Education Monitoring report has estimated that the financing gap for meeting SDG 4 (in LICs and LMICS) is US$100 billion a year during 2024-2030. DFI calculates that a debt relief package that brought down debt service to 10% of budget revenue for lower-income debt distressed countries (and reduced borrowing costs for countries which have to access global markets regularly to fund their budgets) could generate US$500 billion a year, or more than 4 times this education financing gap. There can be no recovery for SDG 4 without urgent action to tackle debt. To move forward, the education community must join others in calling for urgent and bold international action to sharply reduce debt service through enhanced debt relief, together with more concessional financing and enhanced budget revenue collection, to fund SDG4.

DFI is today in Washington launching a briefing on post-disaster debt cancellation. As Commonwealth leaders meet in Fiji, and the world's finance ministers meet in Washington, it is not possible any longer to deny that SMall ISland Developing States have a critically urgent debt crisis, which is stopping them from fighting the climate crisis, protecting their marine environments and blue economies, and preventing progress on their citizens' social and development needs.  This briefing explains how the international community could cancel SIDS' debt service for three years after they are hit by natural disasters, allowing them time to relieve their peoples' suffering and rebuild their economies, for the tiny cost of US$1.9 billion a year. This is "pocket change" to the world's finance ministers, and must be done now.