The World Bank is calling for “radical” debt transparency from developing countries and their creditors in a new push to prevent future debt crises. In a report released on Friday, the Bank urged nations to disclose more detailed information about loans and financial arrangements, especially as global economic volatility drives countries toward more complex and opaque borrowing strategies.
“When hidden debt surfaces, financing dries up and terms worsen,” said Axel van Trotsenburg, the World Bank’s senior managing director. “Radical debt transparency, which makes timely and reliable information accessible, is fundamental to break the cycle.”
The Bank’s recommendations include legal and regulatory reforms requiring governments to disclose new loan contracts, regular independent audits, and the publication of debt restructuring terms. It also wants creditors to open their loan and guarantee books to allow for greater scrutiny.
The call comes as many developing nations increasingly rely on unconventional financing methods, such as off-budget borrowing, central bank swaps, and collateralized transactions—deals that often escape standard reporting mechanisms. Countries like Senegal, Cameroon, and Gabon have turned to these “off-screen” deals in recent years, complicating international efforts to monitor global debt levels. Nigeria, for instance, revealed in early 2023 that a significant portion of its foreign exchange reserves were locked in complex contracts left behind by former leadership.
Although more than 75% of low-income countries now report some debt data—up from below 60% in 2020—only a quarter disclose loan-level details, according to the report. The World Bank argues that without deeper transparency, creditors and global institutions cannot accurately assess the scale of public debt risks.
Recent events underline the urgency. Angola faced a $200 million margin call after its bond values plummeted. Meanwhile, Senegal is negotiating with the International Monetary Fund after misreporting previous debt figures.
By advocating for radical transparency, the World Bank hopes to equip international financial institutions with better tools to detect debt misreporting and ensure more sustainable lending practices. The move, if adopted broadly, could foster greater trust, reduce financing costs, and avert financial instability in vulnerable economies.
