The impact UK debt action could make in the face of aid cuts
CAFOD analysis
This analysis by CAFOD shows how action to address the global debt crisis could produce net gains across water, sanitation, education and health – even in the context of dramatic aid cuts that were announced by the UK government in 2025.
Report summary
Action to reduce debt payments for low-income countries at 10% of revenue would unlock new funds – delivering major gains in water and sanitation, restoring and growing school enrolment, and protecting health systems.
Reversing aid cuts and action on debt must go hand in hand. Reducing debt payments from today’s average of 18% of government revenue to 10% would trigger a 'sovereign dividend' that would:
triple the gains in water and sanitation compared to losses from UK aid cuts
fully reverse the fall in school enrolment
protect health systems from collapse, saving hundreds of thousands of lives.
The New Debt Crisis
There’s a new debt crisis crippling lower income countries. Over 3 billion people are living in countries where governments are spending more money on debts than on health or education.