London, Oct. 14, 2025 (Lusa) - The NGO Debt Justice warned on Tuesday that the International Monetary Fund's (IMF) programmes in 11 low-income countries, including Mozambique, Guinea-Bissau and Sao Tome and Principe, are forcing reductions in spending on health and education.
"The IMF's refusal to provide debt relief has led to drastic cuts in spending on health and education in low-income countries," reads an analysis of the IMF's recent financial adjustment programmes in 11 countries, which include three Portuguese-language countries: Guinea-Bissau, Mozambique and Sao Tome and Principe.
'Health spending has been cut by 18% in countries where the IMF is demanding large-scale austerity instead of allowing them to seek debt relief,' said the document to which Lusa has had access.
According to the analysis by this Non-Governmental Organisation (NGO) dedicated to demanding debt relief in the poorest countries, "spending on education has been cut by 16% and growth in Gross Domestic Product (GDP) per capita is just 1.2%, less than half the average for countries in the global South".
At issue is the IMF's requirement that countries continue to honour their financial commitments and maintain a sustainable debt trajectory to be eligible for a financial adjustment programme.
"The IMF is violating its own policies by considering the external debts of these countries to be sustainable, when full repayment of debts is leading to major cuts in spending on essential social services and trapping countries in a cycle of low economic growth."
According to Debt Justice, the IMF concludes that debt relief is necessary "if full repayment of external debt leads to a lack of progress towards development goals and unsatisfactory levels of GDP growth".
However, they charge, "in none of its assessments of debt sustainability in the eleven countries does the IMF even analyse what the impact of full repayment of high debt levels will be on growth and development."
Debt Justice's research covers countries where the IMF provides long-term loans and where the IMF says there is a high risk of default, yet large-scale austerity is needed rather than debt relief.
In the eleven countries that meet these criteria, including three Portuguese-speaking countries, “public spending on education has been cut by 16% and spending on health by 18%”, point out the economists at Debt Justiça, noting that the growth in GDP per capita, which measures economic expansion in relation to the number of inhabitants, has averaged just 1.2%, less than half the average for countries in the global South.
The eleven countries are Argentina, the Republic of Congo, Egypt, Gambia, Guinea-Bissau, Kenya, Mozambique, Pakistan, Papua New Guinea, Sao Tome and Principe and Sierra Leone.
In Guinea-Bissau, the IMF is running an extended financing programme, under which it has already provided this Lusophone economy with around €40 million in financing.
The financial adjustment programme in Mozambique was interrupted at the end of last year, following the slippage in the vast majority of targets, due to the violence in the last quarter following the announcement of the results of the presidential elections. Still, at the end of August, the IMF said that discussions on a new financial adjustment programme would continue "in the coming months".
In São Tomé and Príncipe, the IMF has an ongoing ECF that will last until almost the end of 2027, under which more than €21 million will be disbursed.
Africa's external debt has risen to more than $650 billion (552 billion), and debt servicing costs will reach almost $90 billion (€76.4 billion) in 2024, according to the United Nations.
These high levels of debt allow foreign investors to impose higher interest rates on loans or debt issues made by these countries, leading to an increasing bet on domestic debt markets, to the point where the banks' limited financial support for local companies has become a concern.
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