By 2030, global public debt will approach or maybe even surpass 100% of the world’s GDP. Much of it remains “unidentified,” as International Monetary Fund (IMF) reports reveal. Contingent liabilities, such as State Owned Enterprises (SOE) debt, are especially problematic. Hidden debt remains a constant feature of debt crises. But will closing the transparency gaps help address the access to finance and unsustainable debt conundrum?
The picture is grim. Low- and middle-income countries borrow more and at higher costs than at any point in history, crowding out investment in essential public goods and services and placing a majority of these countries in high debt vulnerability. As the fiscal space shrinks, development priorities are set aside.
Unsustainable borrowing is further compounded by democracy and capacity deficits. Only a fraction of world economies have legal provisions that mandate disclosures, and many countries don’t publish any loan data. When parliaments, audit institutions, and citizens themselves don’t have the full picture of a country’s borrowing, decisions remain unaccountable and lack democratic legitimacy. As Kristalina Georgieva, the IMF Managing Director, recently said at the opening of a conference on “Public Debt Transparency—Aligning the Law with Good Practices”: “Debt transparency is a public good.”
The conference, co-organized by the IMF and the Sovereign Debt Forum (SDF), took place in Washington, DC, on 14-15 May 2025 and gathered representatives from 72 countries, mainly debt managers from around the world. The conference showed that the constituency for public debt transparency is growing. Panellists firmly set transparency as a central pillar for debt sustainability and investor confidence, and reducing predatory lending.
The conference raised all the important questions when it comes to hidden debt, including: what gets defined, and therefore reported, as public debt; how transparency supports accountability mechanisms, and what to do about tricky issues, such as confidentiality clauses and creditor disclosures.
Debt reporting should benefit domestic accountability actors. Ana Patricia Muñoz from the International Budget Partnership (IBP) stressed that a first important step is to understand how information is used and by whom. Debt reporting should not only benefit creditors but rather domestic accountability actors such as legislatures and supreme audit institutions (SAIs). Accountability for public debt decisions is the goal of transparency efforts. For that, an ecosystem approach is needed, which includes the legal and institutional reforms that foster transparency, oversight, and effective civil society participation.
In addition, capacity support is needed not only for debt managers but also for legislatures and SAIs, which get far less attention. A clear legal framework that sets transparency requirements and oversight mechanisms is crucial for creating the structure around debt decision-making and management, but it is not sufficient.
Debt data publication standards should be specific. The discussions focused on how legal frameworks can improve transparency and what the role of different institutional actors may be. But the mechanics of debt data publication remain somewhat unspecified. While various debt reporting standards exist, there is no open debt data standard as there is in other public finance areas. Many governments struggle with the capacity to implement transparency and accountability recommendations. More tailored support to increase the usability of data that is published is warranted.
Oversight actors should review the terms before a loan agreement is signed. When it comes to individual loan agreements, there is an important conversation around the timing of oversight efforts. International practice and guidelines are scarce on whether, and in which cases, oversight actors should have a chance to review the terms before a contract is signed, such as with some resource-backed loans, or if their role is only to perform the ex-post controls.
Creditors should abide by strict disclosure rules. A big responsibility rests with creditors, both private and bilateral. This is increasingly important as debt instruments are growing in complexity, and the creditor landscape has become more diverse. Bilateral creditors need to commit to disclosing detailed information on their sovereign lending. In addition, private creditors should be required to properly disclose contracts through legislation in the jurisdictions in which they are registered. Efforts based on voluntary reporting, such as the Organization for Economic Co-operation and Development (OECD) lending database, have yielded few results thus far.
Confidentiality clauses in loan agreements should be a thing of the past. There is very little common agreement as to what constitutes a solid justification for a confidentiality clause. Rather, vague arguments like “national security” or “commercial secrecy” are invoked. There is no good example that confidentiality clauses work in favor of the borrowing country. Borrowers should simply legislate against them by mandating full disclosures, without exceptions.
What about civil society? There was less opportunity to discuss in depth the participation of civil society in the debt management cycle. This is crucial to ensuring that decisions are legitimate and informed by the needs of - and the impact on - various groups in society, in particular of vulnerable communities. As many examples around the world have shown recently, citizens are excluded from decision-making and have to resort to protest to make their voice heard. Investment in civil society initiatives around public debt accountability is essential.
The conference was a welcome addition to the global debates around debt transparency, and hopefully, debt managers returned to their offices more convinced of the importance of transparency and the roles of oversight bodies and civil society. Still, investment is needed to set better standards and enforce them, work with creditors on curbing hidden debt, and expand capacity support to all the actors in the accountability ecosystem.