Published by Global Banking & Finance Review®
Posted on June 20, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GoogleThe World Bank calls for radical debt transparency in developing countries to prevent financial crises, urging detailed loan disclosures and regulatory reforms.
By Libby George
LONDON (Reuters) -The World Bank is urging "radical" debt transparency for developing countries and their lenders to stave off future crises, it said in a report released on Friday.
The Bank wants to broaden the depth and detail of what sovereign countries disclose regarding new loans, as more of them enter complex, off-budget borrowing deals due to global market turmoil.
"When hidden debt surfaces, financing dries up and terms worsen," World Bank senior managing director Axel van Trotsenburg said in a statement, adding: "Radical debt transparency, which makes timely and reliable information accessible, is fundamental to break the cycle."
The Bank wants countries to make legal and regulatory reforms that mandate transparency when signing new loan contracts and to share more granular debt data.
It also wants more regular audits, the public release of debt restructuring terms, and for creditors to open their loan and guarantee books.
It is calling for better tools for international financial institutions to detect misreporting.
The World Bank and other multilateral banks have been pressing for years to improve lending transparency. The proportion of low-income countries reporting some debt data is now above 75%, up from below 60% in 2020.
But only 25% of them disclose loan-level information. As financing costs spike due to trade wars and geopolitical risk, more countries are using arrangements such as central bank swaps and collateralized transactions that complicate reporting.
Senegal has used private debt placements as it negotiates with the International Monetary Fund over misreporting of its previous debts, and Cameroon and Gabon have also used what are known as "off-screen" deals.
Angola recently had to pay a $200-million margin call after a rout in its bond prices. In Nigeria, the central bank disclosed in early 2023 that billions of U.S. dollars of its foreign exchange reserves were tied up in complex financial contracts negotiated by the previous leadership.
The Bank said broader loan coverage and deeper loan-by-loan disclosures would enable the international community to fully assess public debt exposure.
(Reporting By Libby GeorgeEditing by Rod Nickel)
The World Bank urges 'radical' debt transparency for developing countries and their lenders to prevent future crises, advocating for broader disclosures about new loans.
The Bank recommends legal and regulatory reforms to mandate transparency in loan contracts, more granular debt data sharing, and regular audits.
Currently, over 75% of low-income countries report some debt data, but only 25% disclose loan-level information.
Developing countries are increasingly entering complex borrowing arrangements, leading to hidden debts that can worsen financing conditions.
Senegal is negotiating with the IMF over misreported debts, while Angola recently faced a $200-million margin call due to bond price drops.
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