Debt Briefing: Colombia

Explanation of terms used: 

Term	Meaning
Sovereign debt(also called government debt, national debt, or public debt)	The amount of money a nation's government has borrowed from creditors which can be domestic or external
Domestic debt	All debt owed to domestic creditors, often issued in local currency or under local law
External debt	All debt owed to foreign creditors (= non-resident, both public and private, including commercial banks, governments, or international financial institutions), often issued in foreign currency or under foreign law
Debt-to-GDP ratio	Showing how much a country owes compared to the financial value of everything that is produced and sold in that country in a year (GDP)
Debt swaps	An agreement where a country restructures its debt by exchanging it for something else in order to reduce its debt burden or improve repayment terms
Public debt audits	A detailed review of how much a government has borrowed, owes, to whom, for what purpose, and whether the debt was acquired legally, transparently, and in the public interest.
Refinancing a loan	Replacing an existing loan with a new loan

History of debt in Colombia:

Colombia was born an indebted nation. The World Bank announced in the late 1940s that Colombia had been a “borrower on the international market” since 1821 (Lynch, 1948). This date lines up precisely with the date of Colombia’s final independence from Spanish colonial rule in the 1820s (Tomes 2024).  Between 1982 to 1988, Colombia paid its creditors more in debt service than the amount of debt it started the period with and yet, by the end, the public external debt burden had increased by over half (S. George, 1992).

General debt situation:

Colombia is currently at risk of a public debt crisis (Debt Justice). Colombia’s Government debt accounted for 61.8 % of the country's Nominal GDP in June 2024, compared with the ratio of 59.5 % in the previous quarter. That is much more than what was spent on education, healthcare and infrastructure together. 

Domestic Debt 

Colombia household debt accounted for 31.3 % of the country's Nominal GDP in Jun 2024, compared with the ratio of 31.8 % in the previous quarter.

External Debt 

Colombia currently has external debt stocks of roughly 242.5 billion USD in Jun 2024. The latest available debt report from the World Bank, looking back on the year 2023, stated external debt stocks of 197 billion USD. Because the more recent data accessed through CEIC is not as detailed, this paragraph will work with charts and data of the International Debt Report by the World Bank from 2023.   

Figure 1

61% of the debt is held by private creditors, 34% by multilateral creditors and 5% of bilateral creditors. The World Bank holds 15% of the debt, the International Development Bank (IDB) 11%. 

Figure 2

As can be seen in figure 2, roughly 168 billion USD of that debt are long-term, while 19.9 billion USD are short-term debt.

Debt Swaps 

In September 2025, five major banks – BBVA, Santander, BNP Paribas, Citigroup, Goldman Sachs, and JPMorgan – offered to buy dollar bonds from Colombia. The creditors say they will buy bonds that are due to be repaid between 2027 and 2061. They will pay less than the bonds’ original value (“below par”), but will also include the interest that has built up since the last payment. The details are not clear yet. 

Earlier in 2025, Colombia turned down a debt-for-nature-swap due to concerns about how this might affect the country’s credit ratings with multilateral banks. In 2004, Colombia did a debt for nature swap, using the US Tropical Conservation Act. In 2004, Colombia’s debt to the USA was reduced by over 10 million USD. Agreement was reached with the WWF, The Nature Conservancy and Conservation International Foundation. Colombian President Gustavo Petro (former activist and left-wing) proposed debt for nature swaps during his inauguration speech in 2022.

Debt Audits

While Colombia has a supreme audit body (CGR) that oversees public finances, there are no records or proposals specifically calling for a debt audit. 

Debt and social contention:

In 2018, a group of young people (aged between 7-25) filed a legal case which led to Colombia’s Supreme Court declaring the Colombian Amazon as ecosystem as a subject of rights (IUCN, 2018). Colombia’s national strike 2021: Protests in April 2021 following a tax reform that was supposed to stabilise external debt and fiscal deficit. The bill was removed on May 2^nd 2021 but the protests continued, focusing on broader underlying problems such as poverty, social injustice and police violence.

Indigenous people, deforestation, and debt in Colombia 

Debt is a driving factor of the local mining and deforestation processes by which indigenous peoples and their territories have been heavily impacted. Colombia has the world's second largest number of internally displaced people, land grabbing for economic gain being the main cause.  Land grabbing is associated with violence, and that it disproportionately impacts Afro-Colombian and indigenous groups. One example rubber industry: the (British-funded) Peruvian Amazon Rubber Company used debt peonage systems and incredible violence to commit genocide, enslaving indigenous people whilst also aiming to “reduce” indigenous populations en-masse (BBC News Mundo, 2012; Gomez Chaparro, 2021; Revelo-Rebolledo, 2019). Environmental activists and land defenders, many with indigenous cultural backgrounds, face death threats – supposedly by people in the industrial agricultural sector. 

In 2017, 38 activists and land defenders were murdered in Colombia – connections between the palm oil industry and paramilitary groups have been established. Trust in the government and authorities is very low since protection of threatened activists and indigenous people never seem to arrive or are frankly insufficient (ibid).

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Debt briefing_ Colombia_EN.pdf

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