Report: Rich Nations Owe Malawi $750 Billion in Climate Debt
The report reveals that Malawi currently has a total foreign debt of $3.5 billion, yet is owed more than 200 times that amount in climate reparations from wealthy nations.
LILONGWE, Malawi — Rich, polluting countries owe Malawi $750 billion in climate debt while the African nation struggles to service foreign obligations that are hampering investments in essential public services, according to a new report released by ActionAid ahead of the African Union Summit, writes Winston Mwale.
The report, titled "Who Owes Who? External Debts, Climate Debts and Reparations in the Jubilee Year," reveals that Malawi currently has a total foreign debt of $3.5 billion, yet is owed more than 200 times that amount in climate reparations from wealthy nations responsible for the bulk of global emissions.
"It is a travesty that African nations are being crushed under the weight of foreign debt, while the world's richest countries continue to look the other way, evading their responsibility to pay for the climate crisis and reparations related to the slave trade and unfair economic practices," said Arthur Larok, the Secretary General of ActionAid International.
The report highlights how debt repayments are forcing countries like Malawi to sacrifice critical investments in health, education and climate adaptation measures.
According to ActionAid, over three-quarters of all lower-income countries spend more on foreign debt than on their health care systems, while more than half spend more on debt servicing than education.
Yandura Chipeta, ActionAid Malawi Executive Director, emphasized the direct impact on Malawi's development: "Such kind of global injustice rears its ugly head more in climate vulnerable countries like Malawi where the government is using almost 30 percent of its national budget to service the debt interests. This cripples the country's investment in vital sectors such as education, health, and agriculture which are ravaged by the escalating climate crisis."
The data show that across Africa, nations paid about $60 billion in debt repayments in 2024 alone, while rich countries should be paying the continent at least $1.4 trillion annually in climate finance — 25 times more than what African nations are currently paying out in debt service.
The report also exposes deep inequities in the global financial system. African countries face interest rates that average 9.8%, compared to just 0.8% for countries in the global North—a discrepancy that perpetuates the cycle of debt for developing nations.
This financial burden comes at a time when Malawi and other African countries are increasingly facing the impacts of climate change, including more frequent and severe droughts, floods, and other extreme weather events that threaten food security and economic stability.
ActionAid's report comes as African leaders prepare to meet at the African Union Summit on February 15-16, where issues of debt, climate justice and economic sovereignty are expected to feature prominently on the agenda.
The report calls for the African Union to prioritize the establishment of a new UN Framework Convention on Debt to replace what it describes as "the present unfair, colonial architecture centred on the IMF."
Additionally, it urges African nations to unite in demanding debt cancellation as partial payment for climate debts and other reparations owed by wealthy nations.
With the African Union declaring 2025 as the Year of Reparations, the report presents a timely opportunity for the continent to address both historical injustices and ongoing financial inequities stemming from colonial legacies.
Economic analysts note that Malawi's situation reflects a broader pattern across the continent, where countries rich in natural resources remain trapped in cycles of debt while bearing the brunt of climate impacts largely caused by historical emissions from industrialized nations.
"The figures are staggering when you consider the scale of what's owed versus what's being paid," said an independent economist familiar with Africa's debt crisis.
"It raises fundamental questions about global economic justice and responsibility for addressing climate change."
The climate debt calculation is based on the historical emissions of greenhouse gases by developed countries and the costs that developing nations like Malawi must bear to adapt to climate change and transition to clean energy sources.
ActionAid's report emphasises that climate finance should not come in the form of additional loans, which would only deepen the debt crisis, but rather as grants or other forms of non-debt-creating assistance.
"We reiterate our calls for the rich climate polluters to cancel all external debts owed by low-income countries like Malawi and provide more grants under the Loss and Damage Fund to enable countries on the frontline of climate crisis to build back better," Chipeta added.
The report also highlights how debt servicing diverts public resources away from critical development needs.
In many African countries, the combination of debt repayments, austerity measures imposed by lenders, and the growing costs of climate adaptation has created a perfect storm that threatens to reverse decades of progress in reducing poverty and improving living standards.
As global discussions on climate finance continue ahead of future climate summits, the ActionAid report serves as a reminder that the question of "who owes whom" extends far beyond conventional debt calculations to encompass historical responsibilities and the mounting costs of climate change.
*Download the full report, along with detailed data tables for 74 countries and specific information for Africa, below:
