Bangladesh is grappling with a deepening debt crisis, with $78.06 billion in external debt, while wealthy, high-polluting nations owe it $5.8 trillion in climate reparations, according to a new ActionAid report, Who Owes Who?.

The findings emphasised the urgent need for debt cancellation and global financial justice.

The findings of the report published earlier this month, ahead of the AU Heads of State Summit in Addis Ababa, highlighted the stark imbalance between the debts owed by low- and lower-middle-income countries and the obligations that high-income countries continue to evade.

As of 2025, it was reported that 54 countries were in a debt crisis, forced to cut spending on essential public services and climate action to meet external debt repayments.

Last year, lower-income countries had paid $138 billion just to service their debts, sacrificing vital sectors such as health, education, human rights, and sustainable development to satisfy their wealthy creditors.

Based on the most systematic studies, the climate debt that rich polluting countries are liable to pay low- and lower-middle income countries is US$ 107 trillion. This is more than 70 times greater than the total external debt of US$ 1.45 trillion that these countries collectively owe.

The report found that Bangladesh’s external debt has reached $78.06 billion, while wealthy nations owe the country up to $7.9 trillion in climate reparations.

Based on historic and projected atmospheric appropriation, climate debt owed to Bangladesh is at least $5.8 trillion under low-range estimates (since 1992).

Despite this, Bangladesh continues to make significant debt repayments, with $4.77 billion paid to creditors in 2023.

In 2024, 16.9 per cent of national revenue was spent on external debt servicing, compared to 3.08 per cent for health and 11.73 per cent for education, highlighting financial strain on essential sectors.

The report revealed that Bangladesh was being forced to divert resources away from essential public services—including health, education, and climate action—to service foreign debt, primarily owed to rich nations, private creditors, and global financial institutions.

Meanwhile, wealthier nations had failed to honour their commitments to climate finance and reparations, with Bangladesh alone awaiting at least $5.8 trillion in unpaid climate debt.

ActionAid Bangladesh Country Director Farah Kabir said the new report highlighted the debt burden of low- and lower-middle-income countries versus the financial obligations of rich nations regarding climate damages, amends, and unmet commitments.

She stressed that Bangladesh needs debt cancellation and freedom from colonial debt structures to address both the debt crisis and climate change.

Farah Kabir added that the Global South must secure debt cancellation and push for the establishment of a new UN Framework Convention on Debt this year.

She also emphasised the impact of the climate crisis, especially on women and girls: ‘We have seen time and again how women are at the forefront of the climate crisis. The failure by the rich polluting countries to pay their climate debt is standing in the way of mitigation and adaptation.’

The report called for a new UN debt framework to replace the IMF-dominated system and urged global leaders to push for debt cancellation as partial compensation for climate debt and reparations owed by high-income nations.

As Bangladesh and other vulnerable nations continue to struggle under the weight of an unjust financial system, the findings of this report reinforced the need for urgent global action to address both debt injustice and the climate crisis.