A growing number of developing countries are borrowing outside national budgets and through increasingly complex deals, making it harder to track how much public debt they’re carrying. That’s the core message of a new World Bank‘s Radical Debt Transparency report, which says the current system of debt disclosure isn’t keeping pace with how countries borrow today—and that has dangerous consequences.
The report finds that although more low-income countries are publishing basic debt data than in the past—up from under 60% in 2020 to more than 75% today—only one in four discloses what’s actually in the contracts they’ve signed on new loans. And with tools like central bank swaps, private placements, and collateral-based borrowing on the rise, gaps in reporting are growing wider.
“When debt is hidden, the risks grow,” said Axel van Trotsenburg, the World Bank’s Senior Managing Director. “Eventually, the truth surfaces—and by then it’s harder and more expensive for countries to borrow. The solution starts with full visibility into what’s being borrowed, from whom, and on what terms. Public trust and sound lending depend on it.”
The report also raises concerns about rising domestic borrowing and the use of behind-closed-doors debt restructuring deals with selected creditors. Without basic transparency—including who’s owed what and under what terms—markets can’t judge risk, creditors can’t coordinate, and governments can’t plan clearly.
To turn that around, the Bank is calling on both borrowers and lenders to make sweeping changes. These include disclosing loan terms in public, updating laws to require transparency, inviting independent audits, and publishing the results of debt restructurings once deals are signed. The report also urges creditor countries to fully engage in reconciliation processes that clarify what developing countries owe.
“Making debt terms public isn’t just a technical fix—it’s smart economic policy,” said Pablo Saavedra, the World Bank’s Vice President for Prosperity. “It helps countries borrow more affordably, and it opens the door to more private sector investment.”
The push is backed by the World Bank’s technical assistance programs, which help countries bring transparency rules up to speed, and by its long-running Debtor Reporting System, widely used as a trusted data source. Plans are underway to expand that system to include domestic debt and improve reporting standards across the board.
