Growing debt burden in low- and middle-income countries during COVID-19 may constrain health financing

Frederik Federspiel; Josephine Borghi; Melisa Martinez-Alvarez

doi:10.1080/16549716.2022.2072461

Growing debt burden in low- and middle-income countries during COVID-19 may constrain health financing

Glob Health Action. 2022 Dec 31;15(1):2072461. doi: 10.1080/16549716.2022.2072461.

Authors

Frederik Federspiel¹, Josephine Borghi¹, Melisa Martinez-Alvarez²

Affiliations

¹ Department of Global Health and Development, London School of Hygiene and Tropical Medicine, London, UK.
² MRC Unit the Gambia at the London School of Hygiene and Tropical Medicine, Banjul, The Gambia.

Abstract

Debt burdens are growing steadily in Low- and Middle-Income Countries (LMICs), compounded by the COVID-19 economic recession, threatening to crowd out essential health spending. In 2019, 54 LMICs spent more on servicing their debt to foreign creditors than on financing their health services. While development loans may have positive effects on population health, the ensuing debt servicing requirements may have detrimental effects on health through constrained fiscal space for government health spending. However, the existing evidence is inadequate for an understanding of whether, and if so how and under what circumstances, debt may constrain government health spending. We call for more research on the impacts of debt on health financing and call on creditors and borrowers to carefully consider the potential impacts of lending on borrower countries' ability to finance their health services.

Keywords: COVID-19; Debt; development loans; health financing.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

COVID-19* / epidemiology
Developing Countries
Financing, Government
Health Services
Healthcare Financing*
Humans
Income

Grants and funding

This manuscript was written as part of FF’s PhD project funded by the Economic and Social Research Council (ESRC) Doctoral Training Partnership (DTP), Reinholdt W. Jorck og Hustrus Fond, Torben og Alice Frimodts Fond, Christian Larsen og Dommer Ellen Larsens Legat, The Anglo-Danish Society Scholarship, Den Raben-Levetzauske Fond, Christian og Ottilia Brorsons Rejselegat for yngre videnskabsmænd- og kvinder, and Carl og Ellen Hertz’ legat til Dansk Læge- og Naturvidenskab. No other funding was received for this work.