The significant health progress made over the past decade in Central, Eastern, Southern and West Africa—where many countries were on track to ending their AIDS epidemics—is now at risk of being reversed due to inadequate financing. One of the major causes of the funding shortfall is rising debts.

In 2020, as the Covid-19 pandemic halted economies and overwhelmed emergency rooms, many African countries borrowed from creditors to provide emergency services to their citizens. But four years later, the terms of those loans are forcing governments to make debt payments at the expense of health and other social services. Nearly two thirds of people living with HIV reside in countries that have not received significant debt relief post-Covid.

In West and Central Africa, debt to GDP ratios increased by 9 percent between 2018 and 2023. Countries such as Burkina Faso, Burundi, the Republic of the Congo, Côte d’Ivoire, Ghana, Liberia, Senegal and Sierra Leone have seen significant rises in their debt burden, now reaching at least 15% of GDP. 

In East and Southern Africa, the situation is even more dire: in Angola, Kenya, Malawi, Rwanda, Uganda and Zambia, governments spend over 50 percent of their tax revenues on debt servicing. Many of these debts are from external private creditors seeking unreasonable profits – for example, one creditor in Zambia would make a 110 percent profit if the country paid back its debts. (As context, even highly profitable companies like Apple do not have profits that surpass 48 percent.) 

Despite Zambia successfully reaching a debt restructuring deal with official creditors, effectively getting some debt relief last year, it’s still slated to pay two-thirds of its budget towards debts over the next two years largely due to not yet reaching a deal with private-creditors. On the ground, crises are already proliferating; hospitals lack essential medicines and equipment. Labor unions and health activists have rallied across Lusaka demanding debt cancellation. 

“Countries are facing life and death decisions,” said Charles Birungi, who leads UNAIDS’ work on macroeconomic and fiscal policy. “Do I pay for hospitals, medicines and education – or do I pay my debt? What if paying my debt means that my hospitals go without drugs?”

Two recent UNAIDS reports focusing on Eastern and Southern Africa and on Western and Central Africa outline that the future of funding for the HIV response in many African countries, as well as broader health and social welfare, rests on innovative measures to ensure governments can invest their own tax revenue for citizens. 

“Progress is being made in the fight against HIV in both regions,” said one of the report authors and development finance specialist Gail Hurley. “Of course there were setbacks, including those related to Covid-19, but external funding and strong political commitment has provided a solid foundation to build on. Countries now need partial or even whole scale debt relief in order to achieve global health goals.”

Debt relief is especially critical for countries that want to move away from relying on international donors to finance their HIV responses. In East and Southern Africa, for instance, most HIV financing comes from two donors: the US President’s Emergency Plan for AIDS Relief (PEPFAR) and the Global Fund to fight AIDS, Tuberculosis and Malaria (which is also heavily supported by the US government). But without debt relief, countries cannot invest tax revenue in health systems.

Based on extensive consultation with economists and policy experts, UNAIDS has called for lenders and international institutions to re-negotiate debt payments to comprise at least less than 15 percent of respective countries’ annual budgets. Such a policy for the heavily indebted countries of Angola, Burundi, Ethiopia, Kenya, Madagascar, Malawi, Mozambique, South Sudan, United Republic of Tanzania, Uganda, Zambia and Zimbabwe would free up $41 billion a year for health, education and social welfare. The strategy has a precedent: the Heavily Indebted Poor Countries (HIPC) Initiative, launched in 1996 by the IMF and World Bank, aimed to ensure that states did not struggle under an unmanageable debt burden. It took a similar approach and relieved 37 countries of more than $100 billion in debt.

UNAIDS also recommends that governments increase tax revenue through measures like raising the income tax of the ultra-wealthy, wealth taxes, reducing tax exemptions and clamping down on tax-dodging. Amnesty International estimates that Zambia, for example, loses over USD 4.5 billion annually through tax evasion and tax avoidance. 

Another option not included in the reports but recommended by UNAIDS’s partner WHO is a ‘health tax’ on products that lead to or exacerbate health issues, including sugary beverages, tobacco and alcohol. In 2023, WHO called on all countries to increase taxes on alcohol and sugary drinks (and has previously suggested taxes on tobacco). These monies could then be re-invested in health systems. 

But UNAIDS cautions that even raising tax revenue will not be enough to address funding gaps unless it goes hand in hand with debt reduction. Without swift changes to enable African governments to invest in health, Birungi fears what the future could hold. “What happens if we wake up tomorrow and the donors are gone?” he asked. “Will we go back to the 80s and 90s when people were dying in massive numbers?”

In 2025, for the first time, the G20 is chaired by an African nation: South Africa. President Cyril Ramaphosa has set debt as one of the priorities for action of the G20 Ministers of Finance. Former South African Finance Minister Trevor Manuel has been appointed to chair the newly established G20 Africa Expert Panel, an international commission of experts to advance proposals. UNAIDS will join efforts with other UN agencies and experts such as Nobel Prize laureate Joseph Stiglitz, co-chair of UNAIDS sponsored “Global Council on Inequality, AIDS and Pandemics”, to advocate for fair financing and debt resolution mechanisms to be advanced in the G20 this year.